Solar Panels Are A Killer For Mortgages Part 2
Last month I blogged about free solar panels being a killer for mortgages, a couple of people commented about having called mortgage providers who would offer mortgages to properties with installed solar panels. So I called a number of mortgage providers saying I wanted to buy a house with installed solar panels on a 25 year roof lease, no one provider gave me an outright yes, most wanted to see the agreement with the solar panel company before proceeding further.
The problem of being unable to get mortgage on a property with roof-lease for solar panels is becoming more widespread according to David Dalby, a director of the Royal Institution of Chartered Surveyors:
Worse still, the bad news comes not from critics of renewable energy but professional intermediaries with every reason to hope house sales can proceed; surveyors and mortgage providers.
Institutions are wary of criticising government-backed schemes to save the planet – but they are also reluctant to be left with bad debts if property deals turn sour. David Dalby, a director of the Royal Institution of Chartered Surveyors told me: “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.”
Not all solar panels are affected. Those which may cause problems were installed by solar companies free of charge to the householder, which then sell any extra energy generated back to the grid under the Government’s Feed-in Tariffs scheme (FITs).
The free solar panel scam provides energy companies a massive return on their investment, typically 10 times that which the home owner saves on electricity and paid for by Green subsidy on everyone’s energy bills.
Where a mortgage lender does refuse the mortgage on the basis of the roof-lease, the solar company may offer a ‘buy-out’ option to the prospective buyer who can purchase the installation at the price stated in the original lease agreement, less depreciation. However, typical costs of between £10,000 and £12,500 could come as a nasty shock for new owners who may already be pushing their finances to the limit.
If the worst comes to the worst, installation companies could refuse to sell their kit to new homeowners and seek to charge for removing the panels and the loss of income from the feed-in tariff. Even the risk of litigation could block a sale, causing the house price to plummet.
Proving once again there is nothing Green about the solar panel scam, it is all about the huge profits from Green subsidies which have so far caused a 15% rise in energy bills.
Paul Broadhead of the Building Societies Association said: “Most building societies will consider lending on properties with solar panels. One factor that will sway their decision towards a refusal is if they believe that the roof space leasing agreement with the panel provider, makes the property less saleable.
With the economy still very weak mortgage lenders are going to be cautious and the slightest thing will make them think twice.
Similarly, a spokesman for the Council of Mortgage Lenders (CML) said: “Lenders support the principle of green energy initiatives, but want to ensure that solar panel leasing agreements do not adversely affect the value or marketability of the property.
Which amounts to the same stance as the Building Societies Association, those free solar panels could well turn out to be a very expensive mistake, there is no such thing as a free lunch, never has been, never will be.
Kent Fire Brigade are teaching other fire fighters how deal with solar panel roof fires following a fire in Sittingbourne on a recent solar panel installation:
Sittingbourne watch manager Mat Barney said solar panel roof fires are harder to tackle because the sun is a constant light source.
He said: “The roof is traditionally only designed to take the weight of the fount, the batons and the tiles and now we’re putting very expensive and heavy glass panels on there, so we’ve got to look at the load bearing of that roof and the danger it poses to firefighters.
“All the time the sun is shining on those panels, they’re live and we’ve got an issue isolating that in the loft space, so they pose a significant problem for us fighting fires on roofs and inside roof spaces.”
The insurance companies will be aware of this event and it will not be long until premiums rise.