Wednesday 13 March 2013

CML Handbook Changes likely to be prompted by Green Deal

Hot on the heals of my earlier blog relating to the conveyancing implications of the Green Deal the CML has outlined a number of issues where it sees potential problems.

Predictably, and no doubt wishing to be politically correct, the CML declares that lenders welcome measures to reduce household energy expenses, however funded. The initiative itself, however, raises questions around, for example, the impact on the value of the property, affordability and future saleability....something of course very dear to a lender’s heart.

Lenders are concerned with any changes or improvements made to a property, since they may have an impact on its value. The CML says that different lenders will have different approaches as to what constitutes a major change to the property and how much of an effect it may have on its value. If history is anything to go buy each lender is likely to take a different approach bringing further confusion to the conveyancing process.

Borrowers are generally obliged to obtain their lender’s consent for improvements that are likely to have a large impact on the property, such as solid wall insulation or amendments which can change the outward appearance of the property. Works likely to have less of an impact, such as replacement windows and doors, may not require consent. Chances are that Green Deal works may require consent.

It is extremely likely that within the next 6 months the CML will amend the Lenders’ Handbook to enable conveyancers acting for lenders to obtain information about the Green Deal commitments on a property. property lawyers should take advantage of LENDERmonitor to keep abreast of any changes.

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