Evidence of growing concern among lenders has emerged in terms of homeowners leasing their roofspace to solar panel providers and the impact this can have on getting a mortgage.
Skipton Building Society has updated its mortgage applications and now requires applicants to disclose whether the property has solar panels installed.
The mutual’s head of lending Colin Dale: “There has been a lot of issues over the past couple of years in terms of people who install panels and use the government subsidy tariff scheme. We need to identify upfront the people who buy their own panels and are not subject to any tariffs and people who are tied in long-term to a lease which is potentially a problem.
“It is becoming increasingly common. We need to make sure right from the outset the panels are approved and have standard leases which do not affect future saleability. There could be potential issues where essentially, part of the home is subject to a legal arrangement with a part provider.”
The Department of Energy and Climate Change introduced a system of feed in tariffs on 1 April 2010. Following this, solar panel providers began to offer free installation onto residential housing where the resident is compensated with free electricity.
The CML says it has published joint guidance with the BSA on what lenders will typically seek comfort on before consenting to the lease of roofspace.
CML spokesman Bernard Clarke says: “We advise borrowers to follow our guidance – and to seek consent from their lender – before agreeing to lease their roof space for solar panels. Lease agreements can last for up to 25 years, and may create problems if the borrower needs to sell before then. Our guidance covers things like ensuring that panels are properly installed and maintained, and that all the necessary permissions have been obtained. It protects the interests of both borrowers and lenders, and should ensure that leasing roof space for solar panels does not inhibit the sale of the property.”
Property Financial Management managing director Chris Dixon says: “I will be emailing my clients to let them know to think twice before putting solar panels on their roof. There could be a massive downside in the long-term to affect the value, saleability and the remortgage potential of a property. It is an uncharted area.”
E.surv director Richard Sexton adds that there is anecdotal evidence of applications falling through due to solar panel issues. See his column on page 11 for more.