Solar panel property requires special criteria care
29 March 2018
Criteria Hub, the 'deep search' criteria engine for mortgage advisers, clubs and networks, has highlighted the importance of brokers ensuring that when they are arranging a mortgage or remortgage on a property with roof mounted solar panels, they understand the issues surrounding prospective lenders’ attitude to properties fitted with panels.
CML guidelines to members are clear that lenders can turn down applications if a survey or surveyor’s opinion is negative about the installation, but lenders will also want to see the agreement between the solar panel installer and the householder and be comfortable with the terms when the panels have been leased rather than bought.
According to Criteria Hub’s Director, Jason Hegarty, unless people have had or enquired about solar panels, it is unlikely that they will understand about the lease option and the issues that arise.
He said, “When we think about buying solar panels for a roof installation, many of us would have never considered that putting solar panels on a house is anything but a good thing. Yet, while most lenders are happy to accept applications on a property with solar panels, it is important to make sure that we understand the criteria they use in deciding to accept or reject. If the panels have been purchased then the issue is really about the quality of the installation and the surveyor will be asked to comment and sight of the Microgeneration Certification Scheme certificate will be required.
Simple enough but when owner occupiers decide to lease panels (to avoid the initial costs of purchase), they are effectively leasing the space on their roofs to the panel provider for a set period – usually 25 years. Arranging finance for purchasers of properties with this kind of arrangement already in place need to be sure that lenders will accept the property as it is and are happy with the existing lease agreement.
Jason added, “Ultimately, responsibility for upkeep of the panels and the roof on which they sit lies with the homeowner. However, lenders need, in the event of roof damage repair or replacement, to be sure that there is a clear cut agreement between homeowner, lender and panel provider that suits all parties. Brokers also need to consider any extra costs, such as increased legal fees and insurance, that might accrue from conveying a property with panels. Not everyone loves solar panels regardless of the potential for cost savings and lenders are very aware that the valuation put on the property will be affected by the kerb appeal of a house with solar panels.”
