As explained in previous editions of Property Update, the Green Deal is designed to assist householders and businesses to increase the energy efficiency of their premises. It will be offered by the private sector to owners and occupiers in the domestic and non-domestic sectors to enable them to carry out energy efficiency improvements. The cost will be repaid over time through electricity bills as an unsecured loan on which interest will be charged.

The government has published a guidance booklet entitled "The Green Deal Guidance for the Property Industry in Great Britain".

The guidance is aimed at people selling, letting or transferring a property. It applies to both the private and public sectors. It is too early to tell what the take up for the Green Deal will be, although it seems that investors (as opposed to private owners) are viewing the scheme with caution.

For example, will a Green Deal contract on a property make it harder to sell or rent out that property at a later date? And what will be the rate of interest applicable to the loan? Figures upwards of 9% have apparently already been circulated.

The other side of that coin, of course, is that energy efficiency measures may well be taken in relation to the country's property stock which otherwise would not have been.

The guidance covers:

  • The Green Deal charge - what it covers and who is responsible for repayment.
  • Other consents required, and confirmation of the charge.
  • Disclosure and acknowledgement provisions for those purchasing a property subject to a charge.
  • The role of the Energy Performance Certificate.
  • Affordability.
  • Long term treatment of properties improved under the Green Deal.

In another publication, the Government has tried to provide guidance to landlords who may be seeking to carry out Green Deal works during a void period. That is to say, after one tenant has moved out but before another tenant has yet committed to taking a lease on the property. A landlord may decide to carry out such works with, for example, a view to improving the rent receivable on the premises, or simply to enhancing the chances of finding a tenant at all in a market ever more alive to energy efficiency issues.

The guidance points out that if the landlord intends the tenant to take over responsibility for the Green Deal repayments, but the tenant is going to be an individual consumer (as opposed to being a corporate being), the landlord will need to bear the Consumer Credit Act 1974 in mind.