Could solar panels prevent you from selling your property?

Posted: 27/03/2012

There are two options to take when having solar panels fitted to a property; the first is where the home owner pays for the solar panels themselves and the second involves a lease agreement where a home owner rents their roof to a solar panel company, in exchange for free electricity. This second set up could prove tricky if you wish to sell your home. It seems that mortgage lenders are turning down applications from people who wish to buy a property that have a solar panel lease agreement set up.

Why is this?

Before the installation of the solar panels, the home owner has to agree to lease their roof for around a 25 year period to the solar panel company. Then the homeowner has to inform the mortgage lender and based on their opinion, the lease is either agreed or declined. This is obviously based on if you have a mortgage on your property.

The reason why a mortgage lender may decline the lease is because of the viability of the ‘rent a roof’ scheme which could cause a lot of legal disputes if the property has to be repossessed. This is where selling a property with this scheme in place may be difficult as mortgage providers are becoming reluctant to lend money to buyers because of the outstanding lease agreement.

If you have solar panels on your roof under this ‘rent a roof’ scheme and are considering selling your property, our advice would be to dig out the paper work and have a thorough read through the fine print. The lease company may only remove the panels if the lender can show it has tried and failed to sell the property. This issue does not affect any home owners who paid for their solar panels to be installed.


Amanda McGovern, Pali Ltd

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(3) Comments home owner, mortgage, property, solar panel

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