How will "Green Deal" refurbished houses affect property valuations

[Zavi]

It seems to me that if you sell a house that has been "Green Deal"ed then the new purchasers are necessarily also taking on a new loan (at a whopping 7% I believe) as well - since they will need to carry on paying the loan off through their electricity bills.

Do you think that could put potential buyers off?

Would the asking prices of such properties be adjusted accordingly (i.e. lowered)?

How much higher would electricity bills be (sorry I know that's like asking how long a piece of string is!)?

Does anyone have any insights to offer?

[TuttoRhino]

My assumption is that most buyers would require the sellers to clear the Green Deal charge as a condition of the sale. This is what most people in the industry think will happen.

In theory, electricity bills should be the same or lower due to the Golden Rule of the Green Deal. But the actual bills will depend on the lifestyle of the people living in the property and it may differ from the calculations used when the Green Deal was taken out.

[ILikeBirds]

I think the fact that the loan isn't recorded at the Land Registry will cause all sorts of problems down the line.

[pettyprudence]

I am in the process of buying a house and looked in to green deal to fund some much needed works in another house I was looking at. Before I researched it it would have slightly put me off purchasing a house as energy costs are becoming a huge concern. However now I know how it works it wouldn't bother me at all. Not sure if a prospective buyer would look in to this though.

[Zavi]

That's an interesting point tutto. If it is the case that anyone taking out a Green Deal to fund energy saving home improvements really needs to clear that loan before they sell a property (i.e. in order not to prevent a significant number of purchasers from being put off) that I just can't see the attraction of using the Green Deal - the interest rates are just not competitive are they?

I wonder are the credit checks as stringent for the Green Deal as they would be for a bank loan / mortgage extension?

I just can't see this scheme taking off...

[pettyprudence]

From what DH tells me (he works for an energy company) the credit checks are very minimal. I guess because if someone stops paying their bills then the meter gets disconnected and replaced with a token meter?

[Zavi]

Wow. So not only will the poor "defaulter" have to pay more for their electricity (if it's metered) but they also have to pay the high interest rate on the loan.

I can't really see this scheme taking off unless you plan to live in the house that you've paid to "green up" for as long as it takes ti pay the bill off.

But I must have misunderstood this. Otherwise why on earth would the government back a scheme with such limited appeal

[pettyprudence]

the idea is though that with the green improvements you make your bills will cost less per month with the loan than they did without. you will not get the funding/loan if the green changes do not make enough savings.
as energy costs are going up and up, you will potentially pay the loan off in less time as the repayments are based on today's energy prices not future higher rates so in theory it'd win-win for the consumer (but only about 10 people in the country have taken up the offer so far so is hard to know the long term out come).
also i think there might be a clause that if you move home within 3 years of having the loan, the loan gets moved to your new address and not inherited by the new bill payers at the original loan address. im not 100% sure about that bit though.