Scenario:
The clients contacted us after having a previous mortgage application declined through another broker. The reason for the decline was the bank had carried out a mortgage valuation which highlighted the property has Japanese knotweed within its boundaries.
This is an issue for the vast majority of lenders as the invasive plant can cause significant damage and reduce the property value. In this case, there was a treatment plan in place and a 10 year insurance backed guarantee, however the lender still declined to proceed.
Challenges:
Adding to the difficulties of finding a lender who can accept properties with Japanase knotweed, the clients had only been living in the UK for just over 3 months. One applicant was British but the second was American on a tier 2 visa.
There are only a handful of lenders who can offer mortgages above 75% loan to value to applicants who do not have indefinite leave to remain.
Solution:
Fortunately for the clients, we have a huge amount of success in getting mortgage approvals for properties with knotweed. As there was a treatment plan in place, the lender will rely on the surveyors comments to determine the value of the property and whether it is suitable to lend on.
This lender can also accept applicants without indefinite leave to remain in the UK for loans up to 85% of the property value where the loan exceeds £500,000. The valuation was carried out within a week of application submission which came back without any issues at the agreed purchase price and subsequently the mortgage offer was issued.
Key figures:
Property value: £1 million
Loan amount: £800,000
LTV: 80%
Repayment type: Repayment
Product type: Fixed-rate
Interest rate: 2.03%