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What is the Green Deal Scheme?

The Green Deal is a government-backed scheme in the UK that allows energy improvements to be made to houses in England, Scotland and Wales without any upfront costs.

Potential energy improvements may include:

  • Insulation, such as solid wall, cavity wall or loft insulation
  • Draught-proofing
  • Double glazing
  • Renewable energy generation, such as solar panels or heat pumps
  • Energy efficient lighting

What happens if I want to buy a property with a Green Deal plan?

Firstly, you should check that the energy saving measures specified under the Green Deal are still at the property, and will remain there after completion of the purchase.

You should read through the terms of the Green Deal, and check the condition of the items involved and whether there are any guarantees for the installations.

When you buy the property and sign the contract, you will be agreeing to the terms of the Green Deal and accept liability for repaying the loan.

If you do not want to buy the property with the Green Deal attached, you should inform your conveyancer and the seller.

If you want advice on a Green Deal plan you should contact the Energy Savings Trust, or an accredited expert or surveyor. Property lawyers or conveyancers cannot advise with matters relating to Green Deal plans.

How do I know if a property has a Green Deal plan?

You can easily find out whether a Green Deal affects a property you’re looking to purchase, by looking at the bottom of the front page of the EPC (Energy Performance Certificate).

An EPC should be provided to you as part of the Estate Agent’s sales particulars, and should show the current repayment charge amount per day, the interest rate, when the loan will be repaid, what the improvements were, and how much these changes should save in energy costs each year. It will also reveal the Green Deal Plan number, and the contact details for the Green Deal Provider.

You must consider the Green Deal plan and whether you are happy to take it over with the purchase of the property.

What happens if I want to sell a property with a Green Deal plan?

If you go on to sell a Green Deal property, you should inform your property lawyer that there is a Green Deal, and whether the loan can be repaid early. In some circumstances you may still have liability after the sale.

How do the Green Deal repayments work?

The Green Deal loan is repaid through your electricity bill, with a certain amount added to each bill. This amount should be set out in the plan.

The first year of repayments cannot exceed the energy savings. In theory, the savings in energy costs should pay for the cost of repaying the loan. However, after the first year there is no guarantee that the cost of repayments will not exceed the annual savings.

In certain circumstances the Green Deal Provider can require early repayment of the amount outstanding under the Green Deal Plan.

What is the process for getting a Green Deal plan for my property?

If you want to live a more sustainable and affordable lifestyle, but don’t have the money to make changes to your home, the Green Deal can be a great way to do this.

Once you’ve established that a Green Deal is cost effective in your circumstances, the next step is to find an approved Green Deal Assessor. They can visit your property to determine what energy savings are possible. A Green Deal plan will then be put together. Once the plan has been agreed, the energy saving works will be installed by a Green Deal Provider.

These improvements will be financed by a loan from a Green Deal Finance Company. While the loan is free to receive, you will have to pay it back.

Green Deals are suitable for residential, rental and business properties. If you are a landlord, the tenants may become the ‘bill payers’ under the Green Deal. If this is the case, any current or new tenants need to know if there is a Green Deal attached to the property.

Further advice and information

If you have any queries about the Green Deal, or need advice, you can contact the Energy Savings Trust Advice Line on 0300 123 1234, or visit their website at: www.energysavingstrust.org.uk

See also the GOV.UK site for the Green Deal at: www.gov.uk/green-deal-energysaving-measures

Your conveyancer cannot advise on the Green Deal, and this guide is only a general outline. You must obtain specific advice from the above sources or from an accredited Green Deal adviser before agreeing to purchase a Green Deal property.

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Frequently Asked Questions

While the loan is not secured on the property, mortgage lenders will want to know if the property has a Green Deal. Before you exchange contracts you should check that the lender is prepared to accept the Green Deal. It may affect their decision to offer a mortgage on the property, or the terms of their mortgage offer. Your mortgage broker should be able to advise on the matter.

You should obtain a copy of the Green Deal plan and keep any maintenance contracts and guarantees that were provided by the original Green Deal Installer.

Not all Green Deal plans can be repaid early. Where they can be, early repayment charges may apply. The EPC will state whether the loan can be repaid early or not. If you do not want to buy the property with the Green Deal attached, you must give the seller plenty of notice to allow them to negotiate the repayment of the loan, if possible. You should also tell your conveyancer.