Partner and Head of Wills & Estate Planning at Andrew & Co Solicitors Helen Newson writes...
New Green Deal Scheme for Home Owners Launched
The Governments new energy efficiency programme ‘Green Deal’ is officially launched today, but despite all the arguments about whether it will help with fuel poverty or not, a YouGov poll shows that 4 out of 5 people have not heard of Green Deal, so what is it?
The Green Deal is a new initiative to encourage people to install energy saving home improvements. The Government hope it will not only reduce soaring energy bills, but also help them meet carbon emission targets by making our homes more energy efficient.
The scheme will allow you to take out Green Deal finance to fund various energy saving measures, such as double glazing, loft, cavity or solid wall insulation, installing a new boiler or even installing solar panels. The repayments for the loan will be funded by savings you make on your bill, and will be taken directly by your electricity supplier.
The scheme is set up so that, in theory, you should not pay more in loan repayments than you save on your energy bill, something the Government call The Golden Rule. This means that before you can apply for Green Deal finance, you must pay for an energy assessor to make an initial assessment to see if the improvements you want to make will be acceptable. The assessor will not only look at your home, but will ask you questions about your energy usage.
If you meet the Golden Rule, an approved Green Deal Installer, such as an energy company or DIY chain, will advise you on the potential improvements you could apply for with a Green Deal loan. The loan will be paid back over a set number of years through your electricity bill. You will have to pay interest on the loan, at a maximum rate of 6.92%.
It might be that a Green Deal loan is not the most cost effective way to fund improvements for everyone, so it is very important you look at all your options and make sure you understand exactly what you are signing up for.
It is also important to remember that the Green Deal loan attaches to the house, so if you want to sell you will have to either pay off the loan from the sale proceeds (and there may be an early repayment charge) or the buyer will have to agree to take on the loan.
If you rent your property, you will need your tenants permission before you sign up, and if you are a tenant, you will need your landlords permission.