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Solar Panels and Mortgages

A guide to getting a mortgage on a property with solar panels.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 5th November 2019 *

All you need to know about solar panels and mortgages

Solar panels are a great option to save money on your energy bill, and they have steadily grown in popularity over the years as people seek more sustainable, eco-friendly power solutions. But you may not know that it can pose problems when it comes to getting a mortgage. 

Fortunately, the advisors we work with are experts when it comes to finding mortgages for properties with solar panels.

Before rushing into any decisions, take a read of the below where we’ll be covering:

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How does buying a house with existing solar panels on affect a mortgage?

While having a house with solar panels is a good way to look after the environment and help save money on electricity bills, they can be very expensive to install. This is where the problems concerning mortgages usually stem from.

In the UK there are subsidies and schemes such as “Rent a Roof” available, yet many people still opt to fund the purchase of solar panels with a loan. Others choose to lease their systems to help save on installation costs - and this is where the most common mortgage problems occur.

Buying a house with leased solar panels versus owned solar panels

The main factor which determines whether you will experience problems getting a mortgage is whether the solar panels are leased or owned by the previous resident. 

Of course, before you complete a purchase you should ascertain whether you’ll actually get the solar panels as part of the sale. If they have been bought outright by the previous owner(s), they may intend to install them in their new home. Many lease agreements also allow (or stipulate) this.

Assuming that the solar panels are staying put, you will be faced with one of two scenarios:

Solar panels on the property have been paid for by previous residents

The most desirable scenario is for a seller to have paid for the panels outright and decided to leave them at the property. 

This is fairly common due to the hassle of removing and reinstalling. What’s more, many mortgage providers require you to pay for any property damage related to the removal of solar panels.

As a buyer, you’re unlikely to experience trouble when applying for a home loan (depending on your other circumstances) in this scenario. You’re essentially getting a mortgage with free solar panels included with the property. 

However, you should check that the panels have the proper MCS accreditation, and find out how old the panels are (will they pose a problem in the future if you wish to sell?)

Buying a home with leased or “rented” solar panels

Things are not quite as straightforward if you’re buying a home with leased or “rented” solar panels, and this is where mortgage applications can get complicated.

Some lenders are not willing to lend on properties with leased panels at all, and those that do may have stricter rules surrounding them. 

If the lease terms state that all financial responsibility is transferred to the new owners, mortgage providers will want to be confident that this is worked into affordability assessments.

If previous owners are responsible for paying off the remaining lease, there are likely to be a number of further legal considerations for lenders before they’re happy to authorise a mortgage to new residents. 

If you’d like to know more about how the inclusion of solar panels may affect a mortgage application for a house you’re looking to buy give us a call on 0808 189 2301 or make an enquiry and we’ll arrange for an expert to get in touch. 

Which mortgage lenders are okay with solar panel properties?

As the number of UK homes with solar panels have soared in recent years, many mainstream mortgage providers have now adjusted their terms to accommodate for this type of situation - assuming you meet their remaining eligibility criteria.

For example, Accord, Halifax and Nationwide (to name a few) will all consider authorising mortgage applications for properties with solar panels, but of course, each has their own lending criteria based on your other circumstances, as covered above. 

Get in touch to speak to an advisor specialising in this area who can recommend other willing mortgage lenders for solar panel properties.

FAQs

So, other than what we’ve already discussed, what other questions should you ask and what do you want to look out for when buying a house with solar panels? Other common questions we receive include:

Are there different rules for solar panel mortgages in certain parts of the UK?

No, the UK as a whole is installing solar panels faster than any other European country. However, you will find that solar panels are more common in certain areas than others; it is far less common to buy a house with solar panels in Scotland than it is in London, for example.

Can I remortgage if I have solar panels on my current property

Yes, but it all depends on your circumstances. If you purchased the solar panels outright there are fewer associated risks, but if you are renting them you may find it tricky - depending on what is written in your lease agreements.

Can I remortgage to fund adding solar panels to my home?

Yes, this may be a good option if you’re remortgaging in order to purchase the panels in full. Just be sure to factor upkeep into your calculations, and think carefully about the consequences later down the line if you decide to lease them.

Talk to a non-standard property expert today

The addition of solar panels to a home you’re looking to buy using a mortgage does not mean you cannot proceed with a purchase as long as you take appropriate steps along the way. This is where we can help.

The advisors we work with can offer the expert knowledge and advice you need and regularly look at specialised areas such as this on a day to day basis. Call us on 0808 189 2301 or make an enquiry to get started.

Updated: 5th November 2019
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.