2.1 The Japanese Knotweed problem

2.1.1 Japanese Knotweed is a hardy bamboo-like perennial plant that grows quickly and strongly. It spreads through its underground rhizomes or roots and thick clumps or stands can quickly grow to a height of over two metres. It was introduced into the UK in the mid-19^th century and was initially popular with landscapers because of its ability to grow quickly and form dense screens. However, it soon became a problem because of its ability to out-compete indigenous flora and their associated fauna. In 1905 the Royal Horticultural Society was warning its readers against planting Knotweed in their gardens unless '...it is kept in check' and even the famous landscaper Gertrude Jekyll advised that it should be '...planted with caution'.

2.1.2 During the first half of the 20^th Century, the spread of Japanese Knotweed beyond the original landscaped gardens was broadly known yet many nurseries still sold the plant until the early 1930s. East Cornwall was particularly badly affected where the price of a house was reputedly reduced by £100 because of the plant (Bailey JP, Connolly AP 2000).

Eventually the government took action. Japanese Knotweed was included in the Wildlife and Countryside Act 1981, making it an offence to 'plant or otherwise cause Japanese knotweed to grow in the wild'

2.1.3 In the last few years this uneasy relationship with the plant became more of a problem when some lenders reviewed their policies. A number of loans on properties affected by Japanese Knotweed were declined. Several of these cases became prominent news stories, changing the status of Knotweed from a complication that was simply 'difficult to solve' to one that could result in property sales failing.

2.1.4 However, the residential property market has faced controversial issues before. Since the mid-1970s the problems of building movement, high alumina cement, asbestos, prefabricated concrete buildings, lead, radon, and electromagnetic fields have presented assessment difficulties that have been largely resolved and assimilated into the lending process. There is no reason why the assessment of Japanese Knotweed cannot follow a similar route.

2.1.5 For the purposes of this paper, 'Japanese Knotweed' refers to all types of Japanese Knotweed defined by the Wildlife and Countryside Act 1981.

2.2 The Council of Mortgage Lenders (CML) and the Building Societies Association (BSA)

2.2.1 The members of the CML and the BSA account for the majority of UK residential mortgage lending. Both represent the views of their members, but neither can impose policies. When the Japanese Knotweed problem became apparent, the CML consulted its members. It did not publish a formal policy, but it was clear that there was a general reluctance to lend on Knotweed-affected properties. However, some individual lenders are willing to consider applications on a case-by-case basis once remediation works have been implemented. Although conditions will vary in practice, these lenders will generally want to see evidence of:

• an initial treatment; and
• a commitment by the owner of the property to fund, in advance, a three- or four-year treatment programme effective against Japanese Knotweed.

2.2.2 Individual lenders adopt policies that reflect their own commercial priorities. The variation in approach across the sector presents a challenge for registered valuers, especially those who carry out mortgage valuations for several different lenders.

2.3 Insurance companies

2.3.1 Discussions with the Association of British Insurers (ABI) and some insurance companies revealed the following:

• Insurers do not generally ask any specific questions about Japanese Knotweed when a homeowner applies for a building insurance policy.
• Although it is not specifically excluded, most buildings insurance policies do not cover damage and problems caused by Japanese Knotweed. Additionally, because the damage occurs gradually, it is unlikely to be covered in the future.
• Where Japanese Knotweed originates from a neighbouring property, insurance companies are likely to pursue others for the costs of the damage caused.
• A number of lenders claim that they are unable to obtain insurance cover for property affected by Japanese Knotweed.

2.3.2 This can leave a homebuyer in a difficult situation where their preferred lender will not grant a mortgage unless the homebuyer can secure a building insurance policy that covers damage caused by Japanese Knotweed; but the homebuyer cannot get an insurance policy that does.

2.3.3 Consequently, lenders and owners may need to tackle the problems posed by Knotweed without the support of building insurance policies.

3.1 How much of a problem does Japanese Knotweed really cause?

3.1.1 Japanese Knotweed has caused problems in the residential market because of concerns about the damaging effects of this invasive plant. However, these concerns are often based on misunderstanding and overreactions. Below, we explore the extent of the damage that can be caused.

3.2 Japanese Knotweed damage - the worst case scenario

If we define the level of damage that most commentators would consider 'serious', it can help residential practitioners be less susceptible to misinformation and so make balanced judgements. This section describes 'serious' damage and section 4.6 estimates the likely cost of this type of damage.

3.2.1 The most common effects and affected areas include the following.

• Drains and other buried services: Knotweed roots can exploit existing cracks and gaps in the pipes in their search for water, which will further damage and, in some cases, block the drains. Large, densely packed clumps or 'stands' of Japanese Knotweed can disrupt drain runs. In the worst cases, the drains must be renewed.
• Patios, paths and drives: Japanese Knotweed can exploit poorly laid surfacing, grow between slabs and movement joints of concrete drives and disrupt brick paving. Repairs can involve the removal of the existing paving and bedding, eradication of the plant, removal of the disruptive crowns and roots and replacement of the path, patio or drive.
• Boundary and retaining walls: closely packed stands can undermine garden walls with shallow foundations. The mass of the stands can 'push over' retaining walls, often resulting in sudden collapse.
• Outbuildings: vigorous stands of Japanese Knotweed can overwhelm lightweight, insubstantial and poorly founded outbuildings such as garden sheds, greenhouses and poorly built garages.
• Conservatories: although the effects will be similar to those described for outbuildings, owners and valuers usually attribute greater importance to these structures; thus, Knotweed-affected conservatories may affect value.
• Gardens: the invasive nature of the plant can ruin well-planned and well-stocked gardens. Some owners spend tens of thousands of pounds on renovating and redesigning outside spaces, including sophisticated water features and bespoke outbuildings. Japanese Knotweed can spoil much of this.

3.2.2 Additionally, the Environmental Protection Act 1990 contains a number of legal provisions that designate Knotweed-contaminated soil as 'controlled' waste. Only properly licensed organisations may remove this waste from a property and they must take it to appropriately licensed waste facilities. This can have serious implications for owners who want to develop their property. In properties affected by Knotweed, large amounts of contaminated soil are likely to result from activities such as:

• adding an extension to the main building;
• redesigning the garden; and
• maintaining and repairing the property following a Knotweed invasion (for example, re-laying paths and drains).

The need for licensed removal of this contaminated soil and any dead plant material will obviously add to the cost of the work.

3.2.3 There are some claims that Japanese Knotweed can result in damage that is more dramatic to buildings, including damage to foundations and plants forcing their way into habitable spaces of dwellings. These extreme problems are thankfully very rare and exceptional.

4.1 Introduction

4.1.1 Once it is established, getting rid of Japanese Knotweed can be challenging. As the Royal Horticultural Society states on its website: 'eradication requires steely determination'. Below we review the different treatment options and evaluate their suitability for use in the residential setting.

4.2 Excavation of the plant and its roots

4.2.1 Knotweed-infested soils can be excavated and removed to an off-site, appropriately licensed, waste-management facility.

4.2.2 The volume of excavated soils can extend to 3m vertically and 7m horizontally from the above-ground growth, resulting in large volumes of waste soil. Disposal costs range from £25 to £50 per tonne (not including landfill tax), with the result that excavation of even a relatively small Knotweed infestation can cost several thousand pounds in waste charges alone. Typically, off-site disposal can result in total treatment costs in excess of £10,000.

4.2.3 However, it is possible to reduce the volume of Knotweed-infested waste soils by segregating rhizomes and crowns (see Appendix B for definitions of these terms). There are a variety of picking, sorting and screening techniques that can achieve this.

4.3 On-site burial and/or encapsulation with membranes

4.3.1 Knotweed can be excavated and then buried on-site, but unless it can be covered with 5m or more of overburden, a specialist root barrier membrane should be installed to fully or partially encapsulate the Knotweed-bound soil, to prevent any regrowth. A root barrier membrane can also be used to encapsulate Knotweed where space does not allow burial at all.

4.3.2 One on-site burial technique is the use of vertical barriers to prevent Knotweed crossing boundaries. This is a popular approach if adjoining landowners are not co-operating with a cross-boundary programme to treat Knotweed infestation. However, vigorous Knotweed growths can often breach vertical root barrier membranes unless they are several metres deep and this should not therefore be relied upon as an effective treatment on its own.

4.4 Biological control

4.4.1 Biological control involves the introduction of a 'pest' species that will attack and control the target 'host' species (in this case, the Knotweed). It is effectively a grazing system, whereby the growth of the Knotweed is controlled to a level that keeps it in check. Biological control does not result in the death of the Knotweed, as this would be counterproductive to the pest species that feeds on it.

4.4.2 A trial is currently underway using a Japanese sap-sucking insect, which could prove an effective biological control agent for Japanese Knotweed. However, it is unlikely that this will change current legislation on the issue.

4.5 Chemical control

4.5.1 Chemical control is the application of specialised herbicides to Knotweed plants over a period of several growing seasons. This is often the cheapest treatment option costing between £3,000 and £5,000 in total for a typical three-bedroom semi-detached house. However, this method can take more than three years to be effective.

4.5.2 In a residential context where space is limited and property boundaries are closely located, planned and managed chemical control is the only realistic option for most properties in terms of practicality, cost and the need to satisfy lender requirements.

4.6 The costs of effective treatment

4.6.1 When preparing a valuation, the registered valuer must account for a variety of issues and factors. Where Knotweed affects a property, the valuer requires a measure of the magnitude of the problem. An estimate of the cost of eradication and subsequent repair can provide this.

4.6.2 Figure 1 shows a garden of a three-bedroom, semi-detached house in a suburban location in a medium-sized British city. It is assumed to be in a satisfactory condition, but has been affected by a large stand of Japanese Knotweed. This is approximately four metres from the rear wall of the house, with the red dotted line showing the extent of the above-ground growth. The stand and its growth has:

• blocked and damaged the rear drain and inspection chamber;
• disrupted the rear patio, leaving many uneven paving slabs;
• damaged the concrete slab beneath the greenhouse and distorted the metal frame;
• damaged several panels of the woven timber boundary fence; and weakened the poorly built garage to the extent that it is now beyond repair.

4.7 Impact on value

4.7.1 By quantifying the likely cost of treatment and any necessary repairs in this way, the impact of Japanese Knotweed can be taken into account in the valuation process and reflected in the same way as any other defect or item of disrepair.

4.7.2 Once there is an acknowledgement that the illustrated case is about as big as it gets, that Japanese Knotweed is unlikely to cause serious structural damage to buildings and that it can be controlled in a domestic context without incurring prohibitive costs, it can start to be considered as just one of the many factors to be taken into account when preparing a valuation.

4.7.3 If treatment is deemed necessary in cases where Knotweed is present in the grounds but no damage has been caused to the property itself, the sole expense may simply be the cost of the treatment. In some circumstances, this may have no adverse affect on value.

5.1 Introduction

5.1.1 An assessment of the seriousness of any problem affecting a residential property is usually carried out in three stages:

• collection of information about the nature and extent of the problem;
• analysis of this information so that the magnitude of the issue can be established; and
• the use of this assessment as a basis for client advice.

5.2 Collection of information

5.2.1 Information is collected through inspection. The inspection process can be subdivided into the following parts:

Knowledge of the area and pre-inspection checks

5.2.2 Local knowledge and pre-inspection checks can help the valuer identify general neighbourhood features regularly associated with the growth of Japanese Knotweed. Such pre-inspection checks may include postal-code searches for flood risk and other environmental issues, the use of mapping and 'street view' sources. Neighbourhood features associated with the growth of Knotweed typically include the presence of:

• local water sources, such as culverts, ponds, canals and lakes;
• public and private paths, cycle-paths, roads, railway or underground railway embankments, dual carriageways and motorways;
• large open spaces, car parks and cleared sites; and
• commercial and industrial buildings, workshops, storage depots and similar.

The property in its neighbourhood setting

5.2.3 All of the likely locations for Japanese Knotweed growth identified in 5.2.2 can similarly be identified prior to and after the actual inspection, for example, while driving through the neighbourhood, arriving at or leaving the property, parking, and preparing for the inspection.

The inspection of the property

5.2.4 The Red Book sets out the standard approach to the provision of valuation advice to prospective lenders in the mortgage valuation. This makes it clear that in normal circumstances, as much of the exterior of the property and the land within the ownership as is readily accessible without undue difficulty or risk to personal safety should be inspected visually. At the time of writing, the current version adds:

'Although personal judgement has to be used, this inspection should include all of the property that is visible when standing at ground level within the boundaries of the site, and adjacent public/communal areas, and when standing at the various floor levels.''

Additionally:

'Where there are locational factors that may impact value they should be recorded and reported. Certain problems, such as...invasive vegetation... are particularly prevalent in certain districts. If appropriate, the valuer should make some reference to these defects, even if the subject property does not appear to be affected at the time of the inspection.' *1

In most cases this visual inspection of the grounds of a property is relatively cursory and takes place naturally during the normal inspection process. However, in circumstances where there may be a greater risk of Japanese Knotweed, for example, where it is widespread locally, this part of the inspection may require particular attention.

If the client wants greater assurance, he or she should commission a more detailed inspection , such as a HomeBuyer Report or a building survey. Although these are not specialist Knotweed services, the inspection of the property and its grounds will be more comprehensive than with a mortgage valuation inspection and there will thus be a greater opportunity to identify any growth. In these cases, inspection along and over the boundaries is important especially where those features listed in 5.2.2 are present.

In Scotland, the extent of the inspection for a Single Survey is approximately the same as for the mortgage valuation described above.

*1 These statements may be revised in subsequent versions of the Red Book. Registered Valuers have a professional duty to use the current version.

5.4 Building an assessment framework

5.4.1 Although the focus of this information paper is on the mortgage valuation, approximately 20% of purchasers commission their own survey, such as the RICS Condition and HomeBuyer Reports and the building survey. These include a more extensive inspection and broader advice about the condition of the property.

5.4.2 Consequently, it is logical to establish an assessment framework that supports the decision-making process across the range of inspection and survey products. Once established, this framework can be flexibly utilised by stakeholders to suit their own business objectives.

5.5 The risk assessment of Japanese Knotweed

5.5.1 This risk assessment takes into account the real risk to a property and addresses some of the concerns of the lenders and insurance companies. A number of definitions may be helpful.

• The term 'habitable space' refers to those parts of the subject property associated with daily living not ancillary spaces (such as outbuildings and/or garages).
• The term 'serious damage' refers to a level of damage described in 3.21 and costed in 4.6;
• According to the Environmental Agency's 'The Knotweed Code of Practice', Japanese Knotweed rhizomes can extend up to 7 metres from the last sign of visible growth. This has been used as the minimum distance in the assessment process.

5.6 Properties previously affected by Japanese Knotweed

5.6.1 Although valuers may not see Japanese Knotweed during their inspections, they may be aware that the property has been previously affected. This information may result from their knowledge of the area or as a response to a 'seller's questionnaire'.

Please note: because the standard of previous treatment regimes adopted by property owners and their agents have been inconsistent, the effectiveness of older treatment programmes must be cautiously assessed.

5.6.2 Whatever the source of the information, one of two responses may be appropriate:

• where there is NO satisfactory evidence to show that Japanese Knotweed is currently undergoing a properly planned programme or that the planned programme has been properly completed, further investigations WILL be required; or
• where there IS satisfactory evidence to show that Japanese Knotweed is currently undergoing a properly planned programme or that a planned programme has been properly completed, further investigations will NOT be required.

5.6.3 An important feature of this process will be the definition of what constitutes 'satisfactory evidence' and although this will be a matter for the individual residential practitioner's professional judgement, it should closely resemble the 'Management Plan' described in 5.7 below.

5.8 Contractors and consultants

5.8.1 As standards develop across the treatment industry, it is likely that lenders will begin to specify that the management plan provider is an accredited member of a recognised trade association. At the time of writing a suitably constituted trade association is not yet in existence, although related discussions are taking place within the treatment industry.

5.8.2 Until a suitable trade association is established, a Japanese Knotweed contractor or consultant appointed to carry out an effective treatment programme should be able to show they have many of the following attributes:

• a transparent fee structure that allows the total cost of the treatment programme to be understood and agreed before any works take place;
• a contract for the works accompanied by a warranty that the treatment programme will be completed. This should be for a suitable period of not less than six years from the start of the works;
• a bond for the warrantee to provide protection if the warranter ceases trading during the warranty period;
• a commitment to regular monitoring for and treatment of regrowth of Knotweed (this would usually be for at least three years, although a longer period might be necessary);
• appropriate legal compliance for the works, including:
• certification from the National Proficiency Tests Council (NPTC) for the application of herbicides;
• licences for waste-handling and treatment (such as a duty of care licence, a waste carrier licence, a waste broker license and an environmental permit, including mobile plant licences for large items of treatment plant);
• possible additional approval from the Environment Agency for the following:
• herbicide spraying close to a watercourse;
• excavating close to a watercourse; and
• burial of Knotweed material on site;
• an appropriate consideration, risk assessment and action plan for the treatment of Knotweed on adjacent properties where it could affect the warranted property;
• proof of the following, annual insurances:
• professional indemnity cover of not less than £2m;
• employers' liability cover of not less than £10m; and
• public liability cover of not less than £5m;
• preferably current accreditations from the United Kingdom Accreditation Service (UKAS) for the following standards:
• OHSAS 18001 Occupational Health and Safety;
• ISO 9001: 2008 Quality Management Systems - Requirements; and
• ISO 14001 Environmental Management System.

5.9 Neighbouring properties

5.9.1 Where the Japanese Knotweed is confined to the grounds of a single property, its eradication will normally be a straightforward process involving only two parties: the property owner and the contractor. However, where Knotweed straddles the boundaries of a number of different properties, the solution will not be so simple. Although the owner of the subject property may have paid for a treatment programme, if the owners of the neighbouring properties do not co-operate, the treatment is unlikely to be effective. In some residential areas property ownership can be complex and transient and establishing a joint strategy in this situation will be challenging. In these cases, providing root barriers along the boundary may appear an attractive option to lenders who require a straightforward, time-limited solution. However, this approach will be unsuitable for many properties for two reasons:

• The disruption of excavations to depths of three metres will be expensive, disruptive and legally challenging, as the owner's legal advisers take into account matters relating to boundaries, party walls and general property rights.
• Not all commentators agree that root barriers are effective ways of preventing the spread of Knotweed (see 4.3.2 for further discussion).

5.9.2 Consequently, where Knotweed is present on a neighbouring property or land, two strategies can be adopted:

• Where the Knotweed is on both the subject and neighbouring property, the management plan should include:
• provision for the treatment of the entire outbreak, regardless of boundary positions; and
• a project management service in which the contractor will co-ordinate plans with willing neighbouring owners regarding access for the inspection and treatment regimes.
• Where a neighbouring owner does not co-operate and prevents the completion of the treatment programme, the new owner of the subject property may have to commit to a continued treatment programme that will restrict the growth of Knotweed on the subject property until a cross-boundary, co-ordinated treatment programme can be agreed.
• Conversely, where the neighbouring owner is the lead party in the management plan, the residential practitioner will want to remind the client that they should cooperate and failure to do so may expose them to legal action for negligence

5.9.3 To protect the legal interests of the subject property owner, his or her legal advisers may wish to put adjacent owners on notice of the problem, indicating what should be done to tackle the Knotweed and the possible consequences of failing to take appropriate action.