Solar panels could make your property difficult to sell

Solar panels may be associated with green issues but beware as they might be viewed as a red card when it comes to re-mortgaging your house or when looking to purchase a property with a mortgage where solar panels are fitted .  This is according to an article recently appearing in the Guardian.

Guardian Money reported on a Southampton couple who were refused by several companies when they tried to re-mortgage their home. The couple had previously agreed, with their lenders permission, to allow a firm to install solar panels on their roof for the duration of a 25-year lease.  They now face the prospect that their property has become ‘unsalable’.

The owners are reported to have said:

"We signed up to this scheme on the basis that we were doing the green thing, but it has turned out to be a nightmare," says John, who works as an air traffic controller.

The implications for us are that we cannot re-mortgage our house on a lower interest rate. We would still have a mortgage but one on the standard variable rate which will increase with the Bank of England interest rates.

We are extremely concerned that we will not be able to sell our house as no buyer will be able to get a mortgage on it. We can't be the only people in this position, can we?"

The big question is how many more home owners are there out there who are oblivious to this potential problem.  Solar leasing deals were heavily marketed last year by companies  looking to take advantage of  Government backed incentives to  those with solar PV panels on their roofs.

The most credible companies advised their customers to seek their lenders agreement, but many didn't.

The issue does not affect those who paid for their panels to be installed. It only relates to those installations undertaken under a lease arrangement.

One can only surmise as to why lenders are struggling to come to terms with these arrangements.    They may be concerned that if they have to repossess and sell quickly there could be a problem in finding someone to purchase the property where there is lease with financial obligations to take on.   This is because the leasing arrangement for the panels follows the property and not the owner who installed the panels. The lease company will only remove the panels if the lender can show it has tried and failed to sell it.

The article suggests having contacted the Council of Mortgage Lenders that the  issues which have begun to arise  may be down to  a failure on the part of the banking sector to formulate a clearer policy on solar panels and how these cases should be approached.

This reported case should however send out a warning to those looking to install panels under a leasing arrangement and also to those acting for those looking to purchase a property where an arrangement exists.   Time will tell whether those homeowners who have sought to reduce their energy bills in line with Government advice and encouragement will be left with problems in selling their property at  market price.  

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Prediction of 19% rise in housing transactions in 2013

Much of today’s focus has been on Budget headlines and little comment has been made of the detail supplied by the Office for Budget Responsibility (OBR), particularly about its view of what is likely to happen to  the property market over the next 36 months.

According to the OBR the future looks bright and forecasts a dramatic increase in stamp duty receipts by 2016, when it expects the Treasury to receive £11.1 billion a year, nearly double the current level of around £6 billion. 

This suggests the OBR is expecting housing market to spring back to life in 2013, with a 19% rise in transaction levels and a further 14% increase in the number of sales in 2014.

This is based on the OBR’s expectation of an easing in credit conditions in 2013

The downside is the OBR has downgraded its housing price forecast expecting prices to rise by only 0.5% next year. This is in line with independent forecasts published this year.  

Looking ahead the picture is even better as prices are predicted to pick up more strongly in 2014, along with further strong rises in transaction numbers.

Let’s hope the OBR is right with its predictions.  The success of this budget clearly rests on the generation of extra Stamp Duty suggesting the Government has put  a lot of faith in the OBR's assessment. 

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Conveyancing firm marks successful year with launch of new website

Entering the market in late 2010 was not the easiest.  The property market was in free fall and the recession was still biting.  Every indicator was pointing to contraction and on the face of it this was not the time to look at expansion.

Not deterred however the partners in MJPconveyancing.co.uk  decided this was the best time to invest in people and information technology and look to build for the future. 

Partner, David Pett, explains:

“At the time of receiving my brief to reorganize and develop our conveyancing department we were operating with one conveyancer and two support staff.  We were fixing fees in line with expectations that predated the rise in competition caused by the introduction of the Legal Services Act.  

The philosophy was to ensure we could provide a service to our litigation clients who were looking for a conveyancing service.  To be honest we had not idea whether we were making any money and as for case management this simply did not exist.

The first step was to invest money into creating a new case management system.  Along with our IT programmer, Leon Williams, we designed and introduced a unique risk and case management system  - Quick Conveyance.  Straight away this put us in a position to develop a new low cost conveyancing model without having to make any sacrifices on risk management or the quality of service.  It also gave me the tools to see how much money we were making and to ensure profit margins were maintained.’

The investment has clearly paid off for MJPconveyancing.co.uk .   The business has gone from strength to strength and is now operating with six case handlers and a support staff of six.  It s handling around 100 completions each month and has recently released a new website whereby instant quotes for conveyancing services can be sought.

The Partners are also looking to see if they can ‘resell’ to other conveyancers the risk and case management system – Quick Conveyance

The next stage in the plan is to operate the business as an alternative business structure which MJPconveyancing.co.uk  hopes will be up and running in August of this year. 

For further details of MJP Conveyancing or Quick Conveyance please email davidpett@m-j-p.co.uk