The Green Deal – it’s not black and white

The Green Deal

The Green Deal’s up and running and if all is to be believed, it should boost the construction industry and save the planet, or at least make a significant impact on our 2020 Carbon Reductions commitment.

As a sceptic of pretty much anything than links ‘green’ with ‘deal’, I think there are questions worth exploring. Yes, the construction industry deserves a much needed boost but who will benefit? The massive bureaucracy surrounding the scheme will rightly work against the cowboy builder, but it will also rule out the huge number of reputable small building firms – many of whom are struggling – in favour of the large corporates and most of these are not struggling. And let’s not forget the way some of these corporates have treated the consumer in recent years; we may be in danger of swapping a cowboy for a posse.

Then there’s the savings to the property owner which are calculated by an assessor based on predictions formed on numerical modelling. If the predicted savings exceed the loan the property meets the ‘Golden Rule’ and the owner simply pays the assessor his £100 or so, takes out a loan at between 6.96% and 9.34% – a significantly higher rate than we’ve all enjoyed for some time –  and turns up the free heat. All of which would be fine if there was an accurate way of predicting fuel prices over the next decade, which seems a little far-fetched given that energy companies don’t seem able to predict prices over the next 12 months.

So that seems a bit of a gamble, but probably one that landlords will take because the loan is added to the fuel bill which in turn will be passed on to the tenant, who of course will make great savings during his 12-month tenancy.

Let’s also not forget that the loan stays with the property so when the owner comes to sell, the buyer picks up the loan. This seems to offer an almost cast iron, non-green deal for any prospective purchaser wishing to ‘chip’ the price of a property.

Ministers declare that the Green Deal represents a potentially historic turning point in the history of UK property and this may prove in time to be correct, but isn’t building new, affordable and sustainable homes the real way forward and to achieve this we need better funding, more flexible loans and a more straightforward planning policy. I feel another blog coming on…

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