A guide to what your client will need to know if they’re buying a property with solar panels or want to install them

With making homes more energy efficient being a hot topic, more people are considering buying a property where solar panels have previously been installed or may want to have them installed on their existing property.

If this sounds like your client, there are a lot of things they will need to be aware of and information we will need to see, before we can offer them a mortgage or provide our consent as their existing mortgage lender.

So that you have everything you need to know, we’ve put together this handy guide which outlines all the key points. For more information, please see our minimum requirements for Solar Panels.

Important information if your client is an existing customer with Kensington:

When they will not need to seek our consent:

They do not need to seek our consent if they are planning on purchasing the solar panels outright from the solar panel company e.g. there will be no lease agreement for them.

The type of property we can consider:

We can only consent to the lease of an airspace for solar panels if their property is freehold.

Information that we will need to see evidence of:

Evidence that the Solar Panel Company and installer are members of the REAL Assurance Scheme. The REAL Assurance Scheme exists to protect and raise standards for consumers who purchase small-scale energy generation for use in their own home.
REAL members are legally obliged to comply with the Scheme’s Consumer Code which is overseen by the Office of Fair Trading. Your client can find further information on their website at www.realschemes.org.uk
Evidence that the installation company has been accredited by MCS which your client’s solicitor will need to provide to us or if the accreditation is available on the MCS website, the solicitor will need to check and confirm that they have seen it.
A copy of the existing or proposed roof lease along with a coloured copy of all plans or exhibits referred to in the lease.
Evidence of the installing solar panel company’s insurance policy/indemnity insurance policy which should include cover for the following: 1) public liability 2) the installation and 3) any damage the solar panel company (and its successors in title and/or assigns) causes to the security property when it or any agent acting on its behalf installs, re-installs, maintains or removes the solar panels and associated system (“the System”).
All necessary statutory consents, including but not limited to: 1) planning permission 2) building regulation consent 3) listed buildings consent 4) restrictive covenant permission and any other relevant title permissions and third -party consents that have been obtained.

The solar panel lease:

England & Wales – If the Property is freehold, our solar panel lease minimum requirements must be satisfied. If Leasehold, a solar panel lease is only acceptable on new build leasehold flats within a block where solar panels are communal. If the solar panel lease actually or potentially adversely affects the existing or proposed individual leasehold flat or confers obligations upon the customer, our minimum requirements must be satisfied.
The lease must not exceed 30 years in term and termination of the lease must be included in the terms without penalty upon repossession.
Where maintenance fees are payable as per the lease, these must be payable by your client.
Your client must ensure their buildings and contents insurers are notified of the Solar panel installation.
Your client must ensure the following is in place: 1) They are able to give any warranty/title warranty and have sufficient interest to grant the lease. 2) Confirmation by a suitably qualified surveyor that the roof is capable of supporting the panels and that the installation of and/or presence of the solar panel system will not adversely affect the value of the property.
Northern Ireland – Properties subject to a solar panel lease are not acceptable for lending purposes.
Scotland – Properties subject to a solar panel lease are not acceptable for lending purposes.

Legal Advice:

We recommend that your client seeks legal advice on the terms of the solar panel lease and the possible impact of the lease on the value of the property, and the ability to sell and/or sell or remortgage it in the future. If they don’t have their own solicitor, the Law Society has a ‘Find a Solicitor’ section on its website solicitors.lawsociety.org.uk.

If your client does take legal advice, we will need their solicitor to provide written confirmation that they have advised them.

If your client chooses not to obtain legal advice, we’ll need them to provide written confirmation acknowledging the following:

That Kensington has recommended they seek legal advice on the terms of the existing or proposed solar panel lease.
That they understand that committing to a lease of the airspace above the property is a long-term legal commitment which may cause difficulties should they wish to remortgage or sell the property in the future.
Confirmation that they have chosen of their own free will not to obtain legal advice.

Important information if your client is considering a mortgage application with Kensington for a property with existing solar panels:

When they will need to seek our consent:

You will need to seek the consent of Kensington if they are considering buying a property where there is a lease agreement for solar panels that have previously been installed.

When they will not need our consent:

We will not need to provide consent if the property they are purchasing has solar panels installed and there is no lease agreement (eg. they have been purchased outright)

Circumstances where we will not provide our consent:

We will only lend on properties with existing solar panels if the property is freehold.

Important information for existing customers and if they are considering a Kensington mortgage application:

The rights of Kensington as the mortgage lender:

In the event that they could not maintain their mortgage payments and fell into arrears, Kensington retains the right to terminate the lease with the solar panel company and remove the panels without penalty, if their property was to be repossessed at a later date.

Residential Lending Criteria