Solar panels and other unusual leases
The welcome move towards greener energy has seen massive growth in the popularity of solar panels, especially on the roof.
Where the solar panels are owned outright by the seller of the property, the only effect they will have on a lending decision will be the extent to which valuers assess them as adding value (or, occasionally, detracting from it), along with all the other factors that affect the value of an individual property.
However, where the seller has granted a lease to a solar panel provider to install panels in return for cheaper energy, the panels remain the property of the solar panel provider, and the installation is, in effect, a lease of the airspace above the roof granted by the owner of the property to the solar panel provider. In this scenario, the terms of the lease will continue to apply to a new buyer and will affect any new lender who subsequently grants a mortgage on the property.
To help the solar panel market, mortgage lenders and their customers, the CML and Building Societies Association (BSA) jointly prepared guidance and minimum requirements for installers in England, Wales and Northern Ireland. More information on the solar panel guidance can be found in the Lenders' handbook section. Providing the installation conforms to these requirements, getting a mortgage on a property with leased solar panels should not present a problem, although different lenders may still have slightly different policies from each other.