04/12/2018 0 Comments
Will solar panels affect your move?
2010 was a good year for homeowners wanting to go “off grid”, as the government launched its Feed-in Tariffs (FIT) scheme, which guaranteed an income to those producing their own electricity. Since then, there’ve been over 780,000 domestic installations – mostly of solar photovoltaic panels which capture the sun’s energy and convert it to electricity.
The scheme also had the effect of attracting numerous companies keen to offer to install the panels in return for the FIT payments. This ‘free’ installation seemed a good offer for the homeowner given the expense of the panels, but it effectively means they are leasing them, rather than owning them outright, and this could impact the ability to buy, sell or remortgage the property.
What are the options?
If the solar panels are owned outright by the property owner this won't affect a lending decision if you’re looking to sell, although it might impact the property valuation (positively or negatively). It's where the panels are leased (ie. by transferring the FIT payments to the installer) where things might get more onerous. In this scenario the panels remain the property of the panel provider and the terms of the lease would continue to apply to a new buyer.
In a bid to help the solar panel market, mortgage lenders and homeowners finding themselves in this situation, the Council of Mortgage Lenders (CML) and Building Societies Association (BSA) published joint guidance. Providing the installation conforms to these requirements it is possible to get a mortgage on a property with leased solar panels, albeit different lenders might have different terms. There may also be a buyout option with the solar panel provider, but the bill could run into tens of thousands of pounds and therefore may not be worth the investment if you’re planning on moving anytime soon.
Looking to add solar panels?
The government has announced that the FIT Scheme could end in March 2019 so if you are considering taking advantage you need to do so now and make sure you take the following considerations into account:
- find an installer certified with the Microgeneration Certification Scheme
- check the installer warranty to see what it covers
- check with your home insurer to find out whether any panel damage is covered and if you need to increase the sum insured for your property
- think long and hard about any potential pitfalls to your future mortgage plans.
If you are looking to buy, sell or remortgage your home, please get in contact to discuss your mortgage needs.
Your home may be repossessed if you do not keep up repayments on your mortgage.