July 8th, 2019. Chris Evans
Knotweed, Neighbours and More: Factors That Can Affect Mortgages and House Prices
When buying or selling a property, you may find your mortgage rates or house prices hit by factors you didn’t previously consider. Japanese knotweed is a stand-out example thanks to its potential to destroy a property’s foundations, with other mortgage rate factors including proximity to mobile phone towers, traffic and noise pollution playing a part.
If a home is seen as an “at-risk property” by lenders, it can be difficult to get a mortgage. Here, we list the most egregious factors mortgage lenders look out for when deciding mortgage rates and, by extension, house prices.
Japanese knotweed made its way to Europe in the 1850s as it was seen as an attractive, easy to maintain option for gardeners. By the time the plant had embedded itself into the make-up of Britain’s ecosystem, though, the damage had already been done with the consequences still present today.
The major issue with Japanese knotweed is its potential to destroy the foundations of homes, as well as the expensive process of destroying the plant. Since the plant’s roots grow so deep, only professionals can certifiably destroy the presence of the species which leads to high costs on the part of the property owner.
Since 2013, it has been law within the UK to state if Japanese knotweed is present in the property via a TA6 form which factors into a conveyancer’s assessment. As an extension to this, those selling the property via a mortgage will need to provide assurances to the lender via a professional action plan, as the existence of the plant or a history of it can be a nightmare for both buyers and sellers.
Mortgage lenders will typically follow guidelines established by the Royal Institute of Chartered Surveyors, but this varies on a lender-to-lender basis. Overall, the existence of Japanese knotweed is far from a positive for sellers and buyers. On average, its existence knocks off a massive 10% of the value from a house price which equates to £20 billion off the UK’s housing market.
Neighbours, Location and Other Factors
Loud, inhospitable neighbours and worn-down neighbouring homes can drive down the value of a property. Buyers will be put off by a bit of noise during a house viewing or an unkempt neighbouring garden, so keep that in mind when selling.
In addition to the above, proximity to high areas of traffic, air pollution and constructs like mobile phone towers and power lines can impact house prices. Poor or obstructed views can be a major stumbling block too.
Furnishings and Interiors
While you may think your orange shag carpet and royal blue wall combo is the next big thing, most people probably won’t share your taste. It’s worth investing in neutral palettes and tones as a bad bit of décor and furniture can make a bad impression on a potential house buyer.
Structural and water damage, too, may not be obvious at first, but if a conveyancer or lender finds these issues, then it won’t be good news for the valuation. If the house is an at-risk property as a result, then rates may be pushed up.
Local Employment Rates
Local and national employment rates can impact house price and mortgage rates. If a house is situated in an area of shrinking economic interest, then people will be less interested to move into that area. By extension, housing demand drops with house prices in tandem.
More broadly, if employment rates are low nationally, then this will have a negative impact on mortgage rates. The more unemployed people there are, the less likely it is for people to make repayments on their mortgage. Fewer buyers on the market will only increase mortgage rates as lender anxiety rises.
Thinking of Buying or Selling?
Whether you’re new to the market, enticed by the Help-to-Buy scheme or wish to apply for a self-employed contractor mortgage, our experienced financial experts can help with residential mortgages.
Article By Chris Evans
July 8th, 2019
Chris heads up the specialist mortgage team which encompasses first charge mortgages, buy-to-let finance and second charge loans.
Chris has spent the last 17 years gaining experience in mortgages, protection and secured loans with roles at Legal & General, Nemo and Mortgage advice bureau giving him a broad understanding of the property finance markets.
Having Joined the Pure Group in 2017 he has worked with Ben to establish and grow the 1st and 2nd charge proposition exponentially in a short period of time. Chris has overseen the recruitment and development of an extremely experienced team of employed and self employed advisers that continues to deliver year on year growth.See more articles by Chris