Eco-loans for Homes

Plans are in place to provide homeowners with the all new ‘eco-loan’ to help them with the cost of installing energy saving measures. These loans, which will work on a pay-as-you-save repayment plan, will give homeowners the money to make their homes more energy efficient. The Government plans to allow people to borrow money to pay the upfront costs of all types of eco-upgrades from cavity wall installation to air source heat pumps and solar panels.

The loan repayments work out as being less than the saving you will make on your energy bills thus meaning you still benefit from the profits of lower energy bills. These loans will also be tied to the house rather than the homeowner. Therefore if you sell the house before the loan is paid off, the loan repayments become the responsibility of the new owner. This is due to the fact the new homeowner will now be benefitting from the lower energy bills.

The Government have stated that they will also regulate more stringent rules for landlords. This would force Landlords to ensure their rented properties are more energy efficient, which will benefit the tenants paying high energy bills for an inefficient home. This aims to make cavity and loft insulation a requirement for renting out properties but also to encourage landlords to install renewable energy sources such as heat pumps as a long-term solution.

These eco-loans have been trialled in 5,000 homes across London, Birmingham and Sunderland and are set to be live in 2012 across the UK. If they are approved, it could mean many homes would benefit from reduced energy bills as well as running on renewable energy systems and significantly reducing their carbon footprint.