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
