Solar Panels?

shorty1988m

So put an offer in, accepted and was very happy. The house is ready to move into and I honestly do love it but as it all came out of the blue when I wasn't really looking, I've had to go into turbo research mode about various things. This brings me on to the issue in that the house has solar panels which as a feature I'm not bothered about but it has turned up some questions that buyers who have bought with them might be able to help with

The panels are leased. It was told to me it had only a few years remaining on viewing which was fine but it turns out that its a 25 year lease and there is a lot, lot longer to run. Again, I wouldn't be too fussed here but in a night of research it has essentially killed most of my excitement about the property.

My concerns are:

-Lack of mortgage variety and higher rates. The possibility of not being able to re mortgage. Worst case I end up not being able to afford it with a looming recession
-Harder to sell home if I need to. No plans to sell my next home but life isn't certain
-Made aware they will be removed up to 2 times if roof work is necessary. Again life isn't certain 
-Damage to the roof from the solar panels. Bird life and such are common problems. Seller had mentioned hearing a pigeon on occasion
-The electricity amount is abysmal especially as the leaseholder gets the tariff. I work away a lot so wouldn't use that much anyway

These are all risks but I could live with some because the risk wasn't too high for this home until I found out the company name 'a shade greener' and the fact there is no lease available at the moment. The mortgage advisor wants a look at it so she can steer clear of any mortgage lenders that wouldn't lend but this company seems horrible and I don't think I could live with them for 18 years.

Anyone got any experience to let me know if I'm making too much of a fuss or that I definitely should be running

eddddy

Perhaps the ideal solution would be to 'buy out' the roof lease.

i.e. Pay A Shade Greener a chunk of money to terminate the lease.

Then the panels could either remain, and be owned by the homeowner - or be removed.

The starting point would be to ask the sellers to get a quote from A Shade Greener for terminating the lease. (I'd guess it would be quite a few thousand - and I guess you'd want the seller to pay.)


But... if you're the first person to show an interest in the house, the sellers might still be thinking that their solar panels are a wonderful asset (just like the solar panel salesperson told them). So you might get major pushback from the sellers if you suggest that the panels are a problem, and the sellers need to pay megabucks to solve the problem.

shorty1988m

eddddy said:

Perhaps the ideal solution would be to 'buy out' the roof lease.

i.e. Pay A Shade Greener a chunk of money to terminate the lease.

Then the panels could either remain, and be owned by the homeowner - or be removed.

The starting point would be to ask the sellers to get a quote from A Shade Greener for terminating the lease. (I'd guess it would be quite a few thousand - and I guess you'd want the seller to pay.)


But... if you're the first person to show an interest in the house, the sellers might still be thinking that their solar panels are a wonderful asset (just like the solar panel salesperson told them). So you might get major pushback from the sellers if you suggest that the panels are a problem, and the sellers need to pay megabucks to solve the problem.

I did think about this initially but it seems buying out is not possible with this company. Or at the very least people haven’t had any luck in doing so from what I can tell. 

There’s a break clause from the lease in the event of repossession from what I can find out but that doesn’t benefit me in any way. 

At the moment I’m on standby and not giving instruction or applying for a mortgage until I have seen the lease/contract so I’m already anticipating a drawn out process if I stay in

Bendy_House

Hi Shorty.

It does feel a bit galling that you are effectively hosting some else's panels, but how 'bad' this is in practice will likely depend on a few things. Such as;

How old is the house? How likely is it that the roof will need any work over the next, ooh, 20 years? And, even if it does, they'll remove them FOC, twice?

How many panels are there, and in what direction do they face? Have you been told the size of the array, and what they typically generate each year?

What sort of heating system do you have - a combi or a hot water cylinder? The latter provides the cheap option of an 'Immersun'-type water heater that will heat up your tank with any unused electricity; you'll come home to free piping hot water most days. In the future, this could be developed into being a larger 'Thermal Store', which will be heated by these PVs alongside other green methods, but I am not very informed on this.

So, perhaps time for a list?! Ps and C's.
Pros:
Free electricity that you CAN use with a bit of work - W/M on a timer to come on when sun facing the panels, auto heating of stored water, etc. Or even fitting a battery or two.
It IS considered a 'good thing' by many folk, so IS likely to appeal to more folk than not in the future. 
As energy costs rise, anything you DO store and use will be of greater value.
Cons:
Might you want to extend into the roof - a loft conversion or skylights?
It 'might' put some people off, as it is almost doing you.
Eyesore?

You make your list, but I've just surprised myself by it seeming to be solidly 'pro' at the moment, and likely to become more so in the future.

Bendy_House

(You'd need to confirm that you WOULD be allowed to fit batteries and stuff to it, of course, should you be considering this )

eddddy

Bendy_House said:

You make your list, but I've just surprised myself by it seeming to be solidly 'pro' at the moment, and likely to become more so in the future.

It's the lease which is the issue - rather than the solar panels themselves.

• Is the lease UK Finance/CML compliant - if not no mortgage lenders will lend on the property?

• If the lease isn't UK Finance/CML compliant, with the 'tenant' (Solar Panel Company) agree to a lease variation? If so, how much will it cost?

• Even if the lease is (or is changed to be) UK Finance/CML compliant, there are still stories of people finding it hard to get mortgages. 

• Mortgage lenders seem to have imposed tougher requirements for these leases over the past few years. Will they continue to impose even tougher requirements? Will it become harder to remortgage, and/or harder to sell to somebody who needs a mortgage?

To me, a lease like this would be a big worry. The property would need to have some big positives (e.g. low price) to counter that.

TBH, my goal would be to buy-out the lease.


Here's what the mortgage lenders say about these types of leases:
https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/2115/
https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/2114/

shorty1988m

Bendy_House said:

Hi Shorty.

........deleted most of the quote because it was big!

The house is a new(ish) build and is about 7 years old. The panels were fitted about 6 months after they took ownership so as far as that goes it is best case. Solar panels are pretty much the same age as the roof. Removing them twice is the deal but research into the company shows it is true but the practice is not the best (waiting 6 months for appointments when your roof could be damaged)

Panels are fully south facing so pretty optimum as far as position goes. Its a combi boiler though so no luck there. I have heard batteries can be fitted but it is apparently not specified in the lease. I work away for half the year so electricity bills will usually level out for me and not become too expensive. I think they are a 4kw system.

Its a 4 bedroom house for myself on my own (planning it as a lifetime house so I will not be moving) but that means I will not be needing to extend it at all so no worries there.

Biggest issues are finding a mortgage this time and risking not being able to find one next time. Its not unheard of for lenders to say no to leased roof schemes. The other issue is dealing with damage to the roof if it ever occurs and what are the potential costs of that. At the moment I'm continuing with the purchase but soon it will get to a point where I need to decide to push forward with surveys and such

shorty1988m

eddddy said:

It's the lease which is the issue - rather than the solar panels themselves.

Yeh this is my issue and I haven't looked at it yet. It seems weird the current owners do not have it but that is what it is. Nothing will be happening until I've seen it along with a solicitor anyway.

I'd love to have the option to buy it out but I think that would kill the sale as I certainly wouldn't be paying to do it, at least not the vast majority of it.

There are stories of being able to get variations but I am not sure how long it takes as they're meant to be a bit naff when it comes to dealing with things. 

The biggest thing is the potential for struggling to get another mortgage in the future. If I don't get one now, thats fine, but in the future while owning the house and the potential for the rates to skyrocket in the next few years. To negate it I would also have to go for a longer deal now like 5 years or more which would be a risk as well as the rates are high now. 

Spreadsheetman

I'd walk away from leased solar. My late father's house had panels from ASG and that put off lots of prospective buyers and killed 3 sales when I tried to sell it. All sales fell through with mortgage refusals (correction - one didn't like not having the option to do a loft conversion).

In the end I shifted it, but for quite a bit less than I could have got without the panels.

Scotbot

Assuming you can buy the lease you are looking at a minimum of £1000 per year remaining, so on a 7 Yr old house at least 18k

shorty1988m

Spreadsheetman said:

I'd walk away from leased solar. My late father's house had panels from ASG and that put off lots of prospective buyers and killed 3 sales when I tried to sell it. All sales fell through with mortgage refusals (correction - one didn't like not having the option to do a loft conversion).

In the end I shifted it, but for quite a bit less than I could have got without the panels.

The mortgage is the only remaining worry to be honest but that is only for me, not intending to sell at all. Its why I'm looking at 3/4 bedroom houses as a single person.

The thing in my head now is weighing up potential problems with this house vs actual problems with other similar houses. This one requires no work (brand new kitchen, bathrooms, living/dining room) so aside from some furniture and appliances its ready to go. All others I have viewed in the past 5 years have needed some degree of renovating. 

I'd also like to get moved in as quickly as possible to begin overpaying a mortgage and reducing what I eventually have to pay. If i wait another year or so then that just gets worse.

At the minute I'm leaning go for it and taking the gamble of no problems with the roof