Green Deal debt may have to be repaid before property sold


Homeowners taking out a loan under the government’s Green Deal energy efficiency scheme could find themselves having to pay off the debt before they can sell their property, according to consumer body Which?

Since January, householders have been able to sign up to the Green Deal, which allows them to pay for energy efficiency improvements in their home with no, or little, upfront cost; instead, these are funded by a loan repaid through their electricity bill.

Crucially, the “golden rule” of Green Deal is that you should not pay back more in loan repayments than you are saving on your energy bill – but this can mean that, depending on the cost of the improvement, you could be making loan repayments for as long as 25 years. The loan is attached to the property’s electricity bill until it is paid off, so if the person who has set up the deal moves house, the bill falls to the new owner.

Research by Which? shows that of the 2,070 people it surveyed in April 2013, a fifth (21%) would reconsider buying a home if it had a Green Deal loan attached to it. Almost half of prospective buyers (46%) would want a Green Deal loan paid off before they would purchase the property.

Which? executive director Richard Lloyd said: “With rising energy prices still one of the top consumer worries, measures that help people make their homes more energy efficient are vital to help save money on bills.

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