Will it be Green Deal or No Deal for home own­ers?

The Government’s Green Deal aims to make prop­er­ties more en­ergy ef­fi­cient but will homes end up less saleable? Sharon Dale re­ports.

Yorkshire Post - Property - - PROPERTY -

THE Government’s Green Deal was launched with a fan­fare but it has been fol­lowed by con­fu­sion and some con­cern.

The scheme of­fers house­hold­ers a loan to pay for ef­fi­ciency im­prove­ments to their prop­erty. The only up­front cost will be about £100 for an en­ergy as­ses­sor who will iden­tify what im­prove­ments could be made, and how much en­ergy you could save as a re­sult. Rec­om­men­da­tions are likely to in­clude swap­ping old boil­ers for new ones, in­stalling dou­ble glaz­ing, in­su­la­tion and so­lar pan­els.

The max­i­mum you can bor­row is likely to be about £10,000 and the loan term can stretch to 25 years. Re­pay­ments will be at­tached to the prop­erty’s elec­tric­ity bill.

While there have been con­cerns about in­ter­est rates of up to 10 per cent, the great­est worry is the saleabil­ity of a home sad­dled with debt.

The Green Deal loan is at­tached to the prop­erty’s elec­tric­ity tar­iff un­til it is paid off, and if you sell your house the buy­ers will be forced to take on the re­pay­ments.

Vic­to­ria Lan­caster, Re­new­able En­ergy Spe­cial­ist at Ge­orge F. White es­tate agency, says: “One of my big­gest con­cerns is when a house owner de­cides to sell their prop­erty. The house may be more en­ergy ef­fi­cient but how does that bal­ance out against a legacy of con­sis­tently high en­ergy bills, due to the ex­tra monthly pay­ment and in­ter­est on the Green Deal agree­ment the seller has en­tered into?

“The cru­cial ques­tion is would buy­ers be put off when faced with paying back up to £10,000 in loans plus in­ter­est?”

The Government says its “golden rule” is that con­sumers should save more on fuel than they pay on the loan so they don’t lose out fi­nan­cially, and there are numer­ous ex­am­ples of this on the De­part­ment for En­ergy and Cli­mate Change (DECE) web­site.

One case study re­veals if you take a loan for £900 for in­su­la­tion, that saves you £159 a year on your heat­ing bills, then re­pay­ments of £106 would be added to your elec­tric­ity bill.

How­ever that re­pay­ment is fixed and doesn’t take a change of cir­cum­stances and us­age into ac­count.

A fam­ily of four could take out the deal then sell their house to a cou­ple who use less fuel. The new own­ers’ en­ergy costs will fall, while the Green Deal pay­ment added to the elec­tric­ity bill will stay the same.

Richard Lloyd, Ex­ec­u­tive Di­rec­tor of Which?, has warned: “If a con­sumer’s cir­cum­stances change, the golden rule gets smashed out of the win­dow.”

A spokesman for the DECE. says: “The Green Deal charge is set at the be­gin­ning and does not take into ac­count a change in fuel us­age.

“If you were wor­ried that a sit­u­a­tion like that could af­fect your house sale you might re­pay the loan early. How­ever en­ergy bills are pre­dicted to rise so a house that is more en­ergy ef­fi­cient should be at­trac­tive.”

Pa­trick McCutcheon, of Dacre, Son and Hart­ley, agrees that buy­ers are at­tracted by en­ergy ef­fi­cient homes but adds: “The high lev­els of in­ter­est on the Green Deal loan are a con­cern and I worry about new buy­ers tak­ing on pre­vi­ous own­ers’ li­a­bil­i­ties.

“I think the scheme needs time to evolve and for un­der­stand­ing to build. Un­til it does it is hard to see it be­ing picked up with great en­thu­si­asm.”

The deal has caught the at­ten­tion of some land­lords, who see it as a chance to bring their buy-to-lets up to stan­dard for free. It would help them com­ply with reg­u­la­tions set to come into force in 2018 that in­sist all ren­tal prop­er­ties achieve an E rat­ing or above on their en­ergy per­for­mance cer­tifi­cates.

Vic­to­ria Lan­caster says: “Ten­ants must get the con­sent of their land­lord prior to pro­ceed­ing with a Green Deal but it is one way for prop­er­ties to be made more en­ergy ef­fi­cient with the cost paid for by the bill payer.

“How­ever, I’d say to any­one that bor­row­ing money at rel­a­tively high in­ter­est rates based on ad­vice from one Green Deal as­ses­sor may not be the best way to pro­ceed.

“My ad­vice would be to do some re­search your­self on what kind of ef­fi­cien­cies you could make in the house. Have you got at least 270mm of in­su­la­tion in the loft? Have you draught­proofed ev­ery en­trance? Th­ese are com­mon sense, low- cost op­tions that you can put in place eas­ily and quickly. Af­ter that, it may be a ques­tion of look­ing at re­new­able en­ergy, a new boiler or dou­ble glaz­ing. Shop around, take ad­vice and al­ways get at least three quotes and see if you can fund the cost your­self. Only af­ter you’ve ex­hausted all other routes would I sug­gest look­ing at the Green Deal.”

In­for­ma­tion is avail­able at www.gov.uk/green­deal or you can ask more de­tailed ques­tions by call­ing the En­ergy Sav­ing Ad­vice Ser­vice helpline on 0300 123 1234.

The government is of­fer­ing a cash­back in­cen­tive for the first raft of homeowners who take ad­van­tage of the Green Deal. Some house­hold­ers in older prop­er­ties and those on ben­e­fits may qual­ify for ex­tra fi­nan­cial as­sis­tance through the En­ergy Com­pa­nies Obli­ga­tion scheme.

DI­VINE IN­TER­VEN­TION: The Old Chapel has been sen­si­tively con­verted and ex­tended to cre­ate a stun­ning three-bed­room home with sen­sa­tional features.For­merly the Bishop of Ripon’s pri­vate place of wor­ship, it is grade two listed and boasts glo­ri­ous stained glass win­dows and mo­saics.

POWER SHIFT: The Green Deal pro­vides loans for ef­fi­ciency mea­sures such as in­su­la­tion and so­lar pan­els, but buy­ers will take on the debt.

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