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Concerns raised about Green Deal finance for property owners and tenants

It says that the concept, which is launched next Monday, could significantly help home owners and tenants but it has concerns about the  finance mechanism and the future risks for conveyancers, estate agents and home buyers.

‘As the first Green Deal finance schemes come into place, our members have voiced a number of concerns about whether a Green Deal loan is actually the most cost effective route for many consumers, while highlighting a number of risks for the wider property profession,’ said RPSA chairman Alan Milstein.

‘For many consumers, taking on a Green Deal loan may not be the most cost effective mechanism to fund any green improvements to their property and it will be important that consumers can access advice on the full range of financing mechanisms available to them,’ he explained.

‘With early repayment penalties and the uncertainty surrounding how having a Green Deal loan attached to your property will impact on the future saleability of the property, for many homeowners it may be advisable to look at alternative ways to fund any energy efficiency measures, which they plan to introduce,’ he added.

He also pointed out that for agents and conveyancers there could be additional work and responsibilities when the first homes with a Green Deal attached come to the market.

Under the existing guidance, it will be the responsibility of the home owner to advise if any Green Deal finance is attached to their property, when they come to sell.

‘However, in reality, this information could quite easily slip though the net. If an old EPC is incorrectly supplied, a new owner could unwittingly find themselves liable for a loan they didn’t expect,’ said Milstein.

‘For those buyers who commission a Home Condition Survey (HCS) on their potential new home, they will enjoy the reassurance that as part of this survey, a copy of the most up to date EPC will be sourced, ensuring that any information relating to a Green Deal loan will be highlighted, early on in the process,’ he added.

‘Of course, this will not cover the four out of five of buyers who don’t commission a property survey at all, the majority of whom mistakenly believe that the lender’s valuation constitutes their survey,’ he concluded.

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