Green Deal – A Good Deal for homeowners?

The Governments latest environmental move The Green Deal has already come into effect. You may have heard and seen it discussed on the news but will it really benefit homeowners? The government say that the scheme has been introduced to allow the general public to make energy saving improvements to their homes and businesses without having to pay all of the costs up front; changes that will ultimately save the homeowner money on their energy bills. These include loft or cavity wall insulation, heating, draught proofing, double glazing or those improvements which utilise renewable energy technologies such as solar panels or wind turbines. In addition, the government have offered cash back on a first come first serve basis as an incentive to kick-start the programme. How does the Green Deal work?
  1. Firstly it is necessary to obtain a formal assessment of the property in order to establish what improvements could be made through the Scheme and to try and ascertain how much could be saved on energy bills as a result of those improvements. The key principle of the Green Deal is that for the funding to be available the energy improvements need to pay for themselves through resulting savings on energy bills.
  2. Following the assessment the work is undertaken by a Green Deal Provider
  3. Once the work has been completed the client starts to pay for the work in instalments through their energy bills. The main advantage of this approach for the client is that they only pay for the improvement whilst they still own the property. Once the property is sold the new owner takes over the Green Deal Plan and continues the payments remaining.
This may seem like a workable scheme and will no doubt benefit homeowners by reducing energy bills, and perhaps in some cases may increase the value of the property (depending on the improvement). However, there are some clear stumbling blocks and some constraints that might make it more difficult for people to tap into the benefits and thereby make those benefits less attractive. One of the first things to consider is that even if a homeowner knows what alternations and improvements they want to make, their property still needs to be assessed at a cost of £100. It may transpire following the assessment that the property is not actually eligible for Green Deal improvements at which point the homeowner is out of pocket! Also improvements can only be carried out by approved Green Deal Providers, taking away the choice and peace of mind of choosing a contractor from the homeowner. Looking at this from another angle taking part in the Green Deal may make it more difficult for a vendor to sell their property as anyone who buys a property after changes have taken place will be subject to cover the loan. Not only this, but the legal process around a transaction which includes a Green Deal aspect is likely to be more complicated and time consuming and so is likely to require higher legal fees in order to complete. Conveyancing solicitors have already argued that much more time will be needed to scrutinise the EPC certificate of a property and make sure that it is up to date, correct legal enquiries that are raised in respect of the Green Deal and also in analysing the impact of the Green Deal alternations and checking on the outstanding payments. All of this extra work will take time and will push up their fees, making the whole process more expensive and therefore far less attractive. At the moment it looks like only time will tell on whether or not this is a scheme which will flourish. For many homeowners the payout and saving from the utility bills may be substantial making the Green Deal a certain winner, and for those who stay in their property for a number of years the issues of resale will not be a factor. Setfords Solicitors have a number of residential property lawyers based all across the country, so if you are buying or selling your home or would like to know more about tapping into the Green Deal call us now on 0845 450 6135.