Solar panels: One more barrier for buyers?

Solar panels: One more barrier for buyers?

Potential buyers are being urged to use caution when viewing properties that have solar panels fitted, according to RICS.  Mortgage applications could be declined where the property’s roof space has been leased to a solar panel company.
Buyers are already struggling to obtain the necessary mortgage finance needed to buy their new home but Banks and Building Societies are making that increasingly difficult for people who might be looking to buy a property with solar panels fitted.
Solar companies, under the Government’s Feed-in Tariff subsidy, install the solar panels for free and then sell the extra energy generated by the panels back to the grid.  The roof space of the property is, subject to lender approval, usually leased from the property owner for 25 years.
Commenting on the dilemma, David Dalby, Director of Residential at RICS, commented:
"We fully support the use and production of sustainable energy; however, at a time when prospective buyers are finding it tough to secure mortgages ‘free’ solar panels can cause a further barrier to homeownership. An inflexible PV panel lease, without a buy-out clause, could result in a failed transaction.
We are advising our members to inform homebuyers of these issues and strongly urge anyone looking to make an offer on a property with ‘free’ PV panels to seek legal advice and consult their mortgage lender beforehand."
Schemes that comply with the Council of Mortgage Lender’s guidance are more likely to see the buyer granted a mortgage.  However, difficulties can arise even on a compliant scheme due to lenders having their own requirements.  A lack of regulation and standardisation when it comes to roof lease contracts sees many lenders assessing on a case by case basis.
Properties with solar panels fitted are becoming increasingly common but the full impact of this issue may not necessarily become fully apparent until the housing market picks up.
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