Mortgage lenders and renewable energy

Overall, what is lender criteria like for houses that already have renewable energy appliances installed like solar panels? Many lenders are okay with this, especially if they are owned by the homeowner and not leased. These contribute to a better grading EPC certificate which can sometimes lead to lenders offering more favourable deals to energy efficient homes. If an existing borrower wanted to install something like solar panels, what would the process be like? They can finance this through remortgaging or a second charge, my advice would be not to secure them against anything which can avoid legal complications when looking to sell. What would you like to see from lenders on the renewable energy/criteria front? More lenders to reward people for taking steps to make their home energy efficient with deals such as cashback or reduced interest rates.

At the moment having solar panels already fitted often just seem to cause more of a conveyancing headache on some of the older schemes. What I would love to see would be more deals where there was a cashback incentive or repricing if someone undertook energy performance improvements. Green deals are great for houses that are already eco friendly but what about the rest of the UK's old, drafty housing stock?

A lot of lenders are happy to accept already installed solar panels, but they do have criteria that must be checked. For example, they will want them to have been installed by a registered company with certificates to guarantee the work. As for clients who wat to fit them when they are in the middle of a mortgage, I would be surprised if any had told their lenders at all! I expect though that as long as the same criteria is passed, there wouldnt be an issue. Lenders should adapt their affordability checks on better EPC properties as for example, the heating bills shouldnt be as high. Maybe a tiered system for each EPC would be a welcome sight.

1. Overall, what is lender criteria like for houses that already have renewable energy appliances installed like solar panels? These days, generally speaking, lenders encourage renewable appliance but the key question raised when it comes to fixed renewable energy appliances such as solar panels, is whether they are owned outright or not. The issue if they are not owned outright i.e. there is a loan outstanding that is secured against the appliance, is what happens if the lender needs to repossess the property? Obviously such arrangements could cause issues with gaining vacant possession and in turn resale of the property. 2. If an existing borrower wanted to install something like solar panels, what would the process be like? Assuming the borrower is not looking to borrow money secured against the property or the renewable appliance they intend to install and assuming not major structural changes are being made to the property that could affect the lender’s security, there is no requirement to obtain consent from most lenders. 3. What would you like to see from lenders on the renewable energy/criteria front? I continue to champion the creation of a “green fund for lending scheme” to be created by the government which lenders can access to create mortgage and loan products specifically aimed at adding renewable energy related appliances to a property. With the cost of energy saving appliances such and solar panels and air or ground source heat pumps in the thousands of pounds, many people do not have the disposable funds to cover the initial installation costs even if they see the value in doing so. The recent introduction of a £20M “pilot fund” to allow lenders starting creating such products is a great start, but with such a short window of opportunity to reduce our carbon emission before we reaching a tipping point in global temperatures, we need a lot more action from all key stakeholders. Note to editors: Propp.io is the UK's first specialist property finance comparison site. We give borrowers the freedom to freely check the market without having to surrender personal details, and then our team of property finance experts take the reins if and when you are ready to get the deal done.