Home-owners to gain from Green Deal as county agents weigh up positives

A new loan for home-owners to complete home improvements to make their property more energy efficient has been backed by county agents but not without warnings over cost.

The Green Deal offers households an opportunity to make energy-saving improvements including insulation, draught-proofing and the addition of solar panels, as part of a new government initiative.

The deal means home-owners would not need to pay large up-front costs and the idea is that the amount of money saved from energy bills after making these improvements would more than cover the repayment of the loan over time.

But while supporting the move, Bryan Lewis, a chartered surveyor at The Property Centre, warned the scheme would be restrictive for some families as it would not be effective for those looking to move in the near future.

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He said: "For those that can't raise finance through other channels and are confident that they will be in the property for the length of the loan this could offer a cost-effective way to make their homes more energy efficient and to reduce their energy bills. But do you know where you will be in 10 years time?"

Bryan added a new owner may become liable for paying the remainder of the loan as it is attached to the property not the home-owner and this could shake up home purchases.

"Any home improvements would normally be reflected in the asking price of the property," he said.

"This is now somewhat negated as the new owner would also be expected to pay the remainder of the loan.

"The seller may be asked to pay the loan as a condition of any sale. This raises the issue of early repayment penalties."

Meanwhile, David Baker, managing director of Gloucestershire-based CGT Lettings, said landlords were strongly advised to consider what works may be required to improve their property's EPC (energy performance certificates) ratings sooner rather than later, to stay ahead of regulation.

He said: "With the soaring costs of gas and electricity together with rising living costs generally, more and more tenants are going to consider the energy efficiency of a property.

"Landlords need to consider improvements now otherwise they risk dreaded void periods."

The cost of improving a typical F rated property to an E rating – which is likely to be the minimum standard for private rentals from 2018 – ranges from £100 up to £660, according to research provided by the British Property Federation and Energy Saving Trust.

However, improving the property to the highest possible EPC rating, A, could cost almost £20,000.

With existing tenancies neither the landlord or the tenant can sign a Green Deal plan without the permission of the other.

There are plans to obligate landlords to install green technologies if they receive a "reasonable request" from tenants but these are thought to be unlikely to come into force before 2016.

Funding for the schemes will be provided through the Green Deal Finance Company, a non-profit making and Government-backed organisation, after authorisation by an accredited inspector. Repayments are added to utility bills for a minimum of ten years and a maximum of 25 years, with interest.