The presence of Japanese knotweed can have a ‘chilling’ effect on the sale of a property. While the physical damage to property from Japanese knotweed is no greater than other disruptive plants and trees that are not subject to the same controls it is particularly hard to eradicate compared with other plants, requiring multi-year treatment. There is also an ongoing risk that Japanese knotweed will regrow.
‘Overly cautious’ approach
A significant industry is built around controlling Japanese knotweed. During the inquiry, the Committee were told that mortgage lenders in other countries do not treat the plant with the same degree of caution.
We find that the UK has taken an overly cautious approach to this plant and advocate a more measured and evidence-based approach to ensure that the impact on lending decisions, for example, is proportionate to the plant’s physical effects.
This Report recommends that Defra commission a study of international approaches to Japanese knotweed in the context of property sales to further inform discussions on this issue, and report by the end of the year.
In our inquiry we heard first-hand the effects on individuals of Japanese knotweed, including disrupted sales, diminished property value and extended legal processes. We also heard that these effects could apply if Japanese knotweed was on neighbouring land. For example, if that neighbouring land was owned by Network Rail it was challenging to get the necessary insurance-backed guarantees for mortgage lenders.
We welcome that the Property Care Association and Network Rail have undertaken to identify solutions which enable Network Rail’s neighbours to obtain insurance backed guarantees relating to Japanese knotweed on Network Rail’s land. Network Rail’s revised guidance on this matter should be published no later than the end of 2019.
We believe that the challenge of resolving disputes relating to Japanese knotweed will be diminished if a more measured and evidence-based approach is taken. We recommend that mediation, rather than expensive and time-consuming litigation, be offered as the initial route to resolution of a dispute if it offers value for money. Aggrieved parties should still have the option to litigation if efforts to achieve a mediated settlement do not succeed.
The existing Royal Institute of Chartered Surveyors (RICS) risk assessment framework for Japanese knotweed has ensured that in many cases lenders have the confidence to lend against properties affected by Japanese knotweed, so long as there are funded treatment plans and insurance-backed guarantees covering the treatment in place. These can be expensive for homeowners looking to sell, but they often provide a route for the buyer to secure a mortgage.
However, the ‘seven-metre rule’ that forms part of the 2012 risk assessment framework is being used as a blunt instrument in some mortgage lending decisions. This framework lacked a clear and comprehensive evidence-base and yet is causing significant problems to some house vendors and purchasers. Following our evidence session RICS has convened meetings of stakeholders and influencers to update its 2012 assessment framework which we hope to see by the end of this year.
Rt Hon Norman Lamb MP, Chair of the Science and Technology Committee, said:
“The presence of Japanese knotweed can have a ‘chilling’ effect on the sale of a property. It is clear that the UK’s current approach to Japanese knotweed is more cautious than it needs to be, especially when comparing it to that of other countries.
“We need an evidence-based and nuanced approach to the issue, one that reassures owners and buyers that they will not be subject to disproportionate caution when trying to sell or buy a property.
“The current framework lacks a clear and comprehensive evidence base and yet is causing significant problems to some house vendors and purchasers. I am pleased that RICS responded to the Select Committee hearing and has already started the process of updating its 2012 assessment framework. We hope to see this no later than the end of the year.
“At present resolving disputes between neighbours regarding land affected by Japanese knotweed is challenging and can be protracted. This challenge will be diminished if a more proportionate approach to Japanese knotweed is taken. However, until we reach this position there needs to be an emphasis on resolving disputes through mediation rather than litigation.”