Japanese Knotweed… an opinion on valuation

Two property owners had each been awarded £15,000 from Network Rail who owned land where Japanese Knotweed was growing that spread to gardens of neighbouring houses.  Network Rail appealed the decision.  On appeal the owners lost approximately £10,000 each, originally ordered for diminution in value of their properties, but kept approximately £5,000 each to pay for eradication.

What is of interest here is how it could affect others whose properties are also infested by Japanese Knotweed.

It is well known that Japanese Knotweed extends rapidly when uncontrolled, and in particular it is an issue along the sides of rail lines and also river banks, where its growth is largely unchecked.

For those who don’t know, Japanese Knotweed was originally introduced in the UK in the 1820’s as an ornamental plant, though it is an invasive species that is extremely difficult to eradicate.   Growing up to 10cm a day and with the ability to cause damage to structures, foundations, roads and walls, it is so destructive that it is now classified as a ‘controlled waste’ which can only be disposed of at a licensed landfill site.

Whilst I cannot comment from a legal point of view, the interesting matter here is where it leaves property owners with Japanese Knotweed which has encroached onto their property from a neighbouring property.

There is no doubt that from a valuation point of view Japanese Knotweed is significantly detrimental and many mortgage lenders on both commercial and residential property will not lend against a property where knotweed is present.

Consequently such properties are very difficult to sell, and where a sale does happen Market Value is likely to be significantly discounted due to the presence of knotweed on site and associated clean-up costs.  This leaves an interesting conundrum in the light of this court case with property owners of affected buildings possibly exposed to falls in value of their real estate holdings though with limited options to pursue the property owners who may be the source of the infestation.

In this case there had been no physical damage to the properties, and for this reason payments for diminution were overturned.  From a valuation point of view, it leaves the property owners in a very precarious position.

Perhaps we are in a situation where a property has to be physically damaged by Knotweed before the owner of its source will be held liable.

It will be interesting to see how this feeds through over the coming months in terms of any advice forthcoming from the Royal Institution of Chartered Surveyors and Mortgage Lenders relating to Japanese Knotweed issues, and how valuers should be approaching the matter in light of a potential infestation.