Japanese knotweed is the UK's fastest-growing invasive weed. It will grow through foundations, walls, roads, almost anything except steel barriers. During the summer, which is its peak growing period, it can grow at speeds of 10cm every day.
Recent research by Swansea university has concluded that Knotweed cannot be eradicated at all: https://www.bbc.co.uk/news/uk-wales-south-west-wales-43882916
It's knocked £20bn off of the U.K. housing market taking around 10% off of the value of each property it affects at an average of £22,800 per property.
It affects up to 900,000 homes out of a total of 25 million in the UK which is 3.6% of the UK housing stock.
Mortgage companies won't lend against properties affected by knotweed unless they have a 10 year plan with an insurance backed guarantee and even then it affects the availability and value of the mortgage products on offer.
It also has appeared in several high profile recent cases as landowners are sued for allowing it to spread to neighbouring properties.
So it's fast, expensive and indestructible, you should definitely stay away...right?
I'm going to say the opposite and here's why... It's coming anyway, it's unstoppable so here's what will happen.
Firstly, the growth will increase exponentially, someone I met a few days ago recounted the story of lily pads on a pond.
It takes 128 leaves to cover the pond and they double every day...
Day 1 = 1 Lily Pad
Day 2 = 2
Day 3 = 4
Day 4 = 8
Day 5 = 16
Day 6 = 32
Day 7 = 64
Day 8 = 128 Lily Pads
Given the growth rate, invasiveness and indestructibility of knotweed it too will only increase its footprint exponentially across the UK....It's coming.
That means that in a set period of time, unless scientific advances are made or we introduce exotic creatures and bacteria that eat it, Japanese Knotweed will cover the majority of the U.K. housing market.
It could be 10, 20 or 50 years away, but it will happen.
That means that the properties that are devalued now due to Knotweed will become level with most of the rest of the market and therein lies an opportunity for a savvy investor and property professional.
It's all about the maths of course, but let's say you buy a property affected by Japanese Knotweed way below its value because of it and calculate in the costs of a 10 year insurance backed control plan so you make a great profit, what does that actually mean?
- Your risk is removed because of the 10 year insured plan, you can extend it by another 10 years at its end.
- If and when you decide to sell you've already deducted the value when you purchased so there's no loss there.
- There is no risk of Knotweed affecting your property and losing you 10% or more after you've purchased it because it already affects it.
- As Knotweed spreads and becomes more normal the value of your property becomes more alike the rest of the market.
It's been said that you should do the opposite of what everybody else is doing, people run from Japanese Knotweed but when you look at the facts it makes business and investment sense to go there because it's coming anyway so you may as well buy at a discount before you have to also sell at a discount.
As with any property, get the maths right first, the value knocked off of Knotweed affected properties right now improves their returns in terms of rental income vs purchase price and makes the business case for investment work better.
In the future, as Knotweed affects more houses and the supply of properties doesn't keep up with the number of people needing homes, the government will likely be forced to act and enforce legislation enforcing mortgage companies to offer the same terms on properties with and without knotweed, if they have an insurance backed control plan.
Until then, as the spread continues and more and more homes are affected, as people turn their backs and run, the competition is low, you can therefore buy at low prices, manage the issue, make more money than you would have otherwise and let nature take its course.
It's coming, it's inevitable, it's indestructible and we can take advantage.