Could the Green Deal cost you a sale?
As from 27 January 2013, homeowners are being encouraged to sign up to the government’s ‘Green Deal’ – an energy efficiency savings scheme. The scheme allows homeowners to pay for energy improvements – such as new boilers and loft insulation – through a loan of repaid over a period of up to 25 years through their electricity bill. Homeowners will first be visited by an assessor, who will ask some basic questions about their energy usage.
The scheme seems attractive in principle. In theory, the loan transfers on the sale of the property to the energy payments made by the new homeowner. However, in practice, if a potential buyer doesn’t agree with the ‘improvements’, they may insist that the seller pay off the loan before they agree to buy. In such a situation, the bill could be substantial as, under the scheme, a provider is legally entitled to charge a substantial early repayment fee to take into account interest that would have been paid had the loan run its course.
Consumer organisation Which? recommends that anyone interested in signing up to the Green Deal first scrutinises the terms and conditions very carefully.