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I want to do my bit for the environment but…will solar panels affect my mortgage?

23 July

I want to do my bit for the environment but…will solar panels affect my mortgage?

You care for our planet, and want to do your bit by making the most of your roof space and installing solar panels, but you have a mortgage. Will your mortgage be affected by installation of solar panels?

The question appears to assume you already have a mortgage on your property.  If so, the short answer is, “ask your mortgage lender”. 

The installation of solar panels on your roof is unlikely to have an effect on your mortgage repayments, but your lender will primarily be interested to ensure that, if you are unable to repay your loan, it is able to repossess your property and successfully sell it to recover the debt owed to the lender.  The success of a sale can be affected if there are legal issues around the solar panel installation. Such issues can include:

  • Are the panels owned outright by the home-owner, or are they owned by someone else and the home-owner leases the roofspace to the owner?  If the latter, has a properly enforceable lease been put in place?  Does the lease include rights for the mortgage lender to break the lease if the presence of the panels is impeding a sale? What happens to the panels at the end of the lease?
  • If the panels are owned outright by the home-owner, are they guaranteed and were all of the appropriate installation certificates obtained?  Is the structural integrity of the property and the roof adversely affected.
  • Aside from the lender’s consent, were any other consents required?  If the property is leasehold, was the consent of the landlord required and was it properly obtained?

There is a scheme in place called the Microgeneration Certification Scheme (“MCS”) and if the various issues around the panels comply with this scheme, then the presence of solar panels should not cause too much of an issue for your mortgage lender.

If you are about to embark on the purchase of a property with solar panels installed, not only should you ask your solicitor to check these issues out for you so that you are properly informed, but you should ensure from the outset that your mortgage lender is aware of the existence of the panels and is happy with the situation and does not have any special requirements or conditions attaching to your mortgage.

Can I sell my house with solar panels?

Provided you have (or your solicitor has) carried out all the appropriate checks prior to either buying a house with solar panels installed or installing new solar panels, then their presence should not be a bar to selling your house.  Many people will see the presence of MCS compliant solar panels, accompanied by appropriate documentation, installation certificates, and guarantees as a major benefit, hopefully saving them money as well as contributing to the national electricity supply.  To that extent, they can be a definite selling feature. However, it does not need to be said that, if there are defects in the installation or the documentation is deficient, then clearly a sale will not proceed smoothly.  

Others might view the current generation of solar panels as “ugly” and detrimental to the appearance of the house, and that can obviously affect the marketability of the property.

There is no evidence to suggest that properties with solar panels sell quicker or for a higher price than those without so, as with most things, it comes down to a matter of personal preference.  Whatever your own preference, make sure you assess the risks and take professional advice. 

If you have any concerns about any aspect of the ownership or installation of solar panels on your property or a property you are looking to purchase, or have any queries regarding the points addressed in this article, please contact a member of our property team today on 0114 249 59 69.