Solar Panels and Mortgages

Wondering how to get a mortgage for a house with solar panels? Find out how with our in-depth guide, for more expert advice speak to a specialist broker.

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Home Property Types Solar Panels And Mortgages
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

Reviewer: Jon Nixon

Director of Distribution

Updated: March 18, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

March 18, 2024

Solar panels are now a common sight on UK homes – and have been since 2010 when the government introduced the Feed-in-Tariff (FiT) that saw the rise of so-called Rent-a-Roof schemes.

These schemes were lucrative for installers and helped homeowners save on energy bills. But they also tied some people into long term leases that have created problems when it comes to buying and selling property.

In this article we’ll look at the potential complications associated with getting a mortgage for a house with solar panels, what steps you can take to overcome them, and why a broker is your best route to finding the right lender for your circumstances.

Can you get a mortgage on a property with solar panels?

Yes of course you can. There is no reason why solar panels should prevent you from getting a mortgage. But there are some potential issues that could arise depending on when, how and by whom they were installed.

Fortunately, the fact that so many homeowners have opted for solar panels in recent years, has meant both high street lenders and specialist providers have adapted to this new element of assessing properties and mortgage applications.

Although working out which is right for you requires a little inside knowledge.

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How solar panels can affect a mortgage application

There are several reasons why solar panels might affect your mortgage application, and they all stem from the installation.

Leased solar panels

Rent-a-roof schemes saw companies offer free solar panels in exchange for being able to sell the excess electricity produced. But this meant homeowners signing a lease (typically for 25 years) at the time that can complicate mortgage applications today.

Some lenders will simply not accept applications for homes with leased panels. And many of those that do will have strict criteria, such as the unconditional right to break the terms of the lease in the event of repossession in order to facilitate a quick sale.

Depending on the terms of the lease, it may be that:

  • The sellers must pay up the outstanding amount left on the lease. This will add another layer of legal complexity to the sale and is enough to put some lenders off.
  • The buyer is required to take over the lease following completion. This brings different legal issues as the lender will need to satisfy themselves that the lease is in line with their lending policy. The ongoing costs will also need to be factored into their affordability calculations when assessing your income and expenditure.

Regardless of the above, the lease may state that the property owners are responsible for repairs to the solar panels. Again, each lender will have their own attitude to clauses like this and it could affect the outcome of your application.

Some lenders will approve a maximum loan to value of 75% where there is a lease in place.

Solar panels that are owned outright

Solar panels that have been bought outright by the current owners are less problematic but can still raise concerns for some mortgage providers.

There is a slim chance that the owners will want to remove the solar panels and take them to their new property. However, they will then be liable for the cost of roof repairs, so this is an unlikely scenario.

Presuming they don’t take the solar panels with them, you simply become the owner of said panels when you complete your purchase.

Even in these circumstances, though, lenders may want to check the warranty to make sure you can insure them. Plus, there is the issue of whether the panels were installed by a certified company.

Microgeneration Certification Scheme

Many of the problems with finding a mortgage for a house with solar panels are linked to the Microgeneration Certification Scheme (MCS) – a nationally recognised quality assurance scheme.

To be eligible for FiT, homeowners were required to use MCS certified installers. But those who bought their solar panels outright or via hire purchase, may not have done so. While an MSC certified installation was not mandatory, it does give mortgage lenders confidence in the installation and the products used.

Before approving a mortgage, lenders will need to check that the installation complied with guidelines (and building regulations if applicable), and any deviance will significantly limit your choice of lenders.

Where the MCS certification status is unknown, your pool of potential lenders will be very small and it’s likely that the provider’s legal team will need to be involved.

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How a broker can help you get approved for properties with these features

The addition of solar panels to a property can sit anywhere between causing no real problems at all or a series of complex issues, according to various factors. Applying for mortgages without an expert onside can result in months of wasted time, money squandered on ultimately meaningless surveys, and multiple rejections.

All of which can hamper your chances of approval with subsequent applications.

If you’ve found a property with solar panels, seek the help of a broker right away. They will assess your circumstances, compare all possible mortgages, and let you know exactly what documentary evidence you will require for all aspects of the application – including the solar panel paperwork.

If you get in touch we can arrange for a broker we work with, who has experience in this area, to contact you directly.

Which lenders offer mortgages on properties with solar panels?

Most UK lenders will consider applications for homes with solar panels, but generally with caveats. For example:

  • Halifax and Scottish Widows will not accept applications for leasehold flats where photovoltaic cells have been fitted.
  • Natwest will only accept applications if there is evidence that the installation was carried out by an MCS certified company. But they will not accept applications for mortgages with solar panels in Northern Ireland because of legal documentation relating to roof space leasing for solar PV panels.
  • Nationwide will consider applications provided the installation meets the minimum standards as laid down by the UK lending handbook.

Other lenders have their own unique requirements.

Other factors to consider

It’s worth considering your long term plans for the property if it has solar panels. If you’re thinking of removing the panels prior to the lease being up, this could run to thousands of pounds. Some companies will even expect you to compensate them for loss of earnings as part of the early settlement fee.

So, for example, if you intend to remortgage for home improvements in a few years time, you will need to factor in the costs of ending the lease early, as well as the removal and construction work.

Some installation firms sold leases to investment firms after the installations were complete. This can make it particularly difficult to obtain the evidence your lender needs – especially if the installation company is no longer operating.

For this reason, it’s important to find this information out as soon as possible.

Can you remortgage to raise funds to install solar panels?

Yes. There is no reason why you can’t remortgage to raise the money to install solar panels either with your existing lender or by finding a better deal elsewhere.

You will need to inform your lender that this is your intention to ensure your new mortgage is compliant with their lending policy. It also makes sense to speak to a broker, not only to ensure you get the best deal on this mortgage, but to prevent making future remortgages more challenging than they need to be.

Get matched with a broker with experience in these cases

With so many variables when it comes to getting a mortgage for a house with solar panels, the most important thing is to find the right broker.

Our broker matching service will put you in touch with a whole of market broker who has a track record of helping people in your situation. They will make sure you get the best deal without having the hassle and worry of trying to negotiate with lenders, sellers and lawyers over issues relating to solar panels.

To get matched with your ideal broker, call today on 0808 189 2301 or enquire online.

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FAQs

This is very much a personal choice. They can save you money and are a green alternative, but there is no evidence that having solar panels increases the value of a home or makes it more desirable to buyers.

It shouldn’t really affect your house sale. Almost all lenders will consider mortgages for homes with solar panels, although it can make for slightly a more complicated mortgage application for the buyer. Owning your solar panels outright will help make the process smoother.

If you have found the house you want, don’t let solar panels put you off buying it. It might mean your mortgage application takes slightly longer, but shouldn’t affect you getting approved. Our broker matching service will pair you up with a specialist broker who can help speed things up.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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