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HEEPS Equity Loan

Helping you fund energy efficiency and repairs in your property

If you're a homeowner or a private landlord in Perth and Kinross, Glasgow City or Argyll and Bute, and you're finding the costs of making energy efficiency home improvements prohibitive, we can help. 

The Scottish Government's Home Energy Efficiency Programmes for Scotland (HEEPS) Equity Loan is a pilot programme designed to help homeowners and private landlords make energy improvements and repairs to their properties. 

Energy Saving Trust is partnering with Care and Repair to deliver this scheme, and Care and Repair will be on hand to support householders throughout the process. 

What is the HEEPS Equity Loan?

The HEEPS Equity Loan lets you borrow money against the value of your property. There are no ongoing repayments - you only pay back what you've borrowed when you sell the property, or when the last applicant dies. 

What can you use it for? 

You can use the loan for energy efficiency, renewable and repairs work. At least 55% of the costs of the work must be for energy efficiency improvements, and can include things like: 

  • a new boiler
  • insulation
  • double glazing
  • renewable technologies
  • repairs which reduce heat loss through the building's fabric or damp and moisture

Any measure you apply for must be recommended in the property's Energy Performance Certificate, or in an energy report that Home Energy Scotland supply. You cannot use an Equity Loan for any work which has already started. 

Here's a full list of eligible measures >

How much can you borrow?

The most you can borrow is £40,000 - but you can't borrow more than 50% of your property's market value. You must also retain a minimum of 30% equity in your property. 

How much do you pay back? 

What you pay back is based on the equity stake the Scottish Government takes in your property, and its value at the time you make the repayment. There is also a maximum cap applied to what you have to repay to make sure that, if you see a sharp rise in your property's value, you will not be unduly penalised. 

It will be the lesser amount of: 

  • the Scottish Government's agreed equity share of the property's sale price, or
  • the loan amount if it had been a commercial loan at 2.5% APR for the duration of the agreement. 

This ensures that, if your property's value increases significantly over a short time, what you repay will be restricted to 2.5% APR of the original amount you borrowed.

Take a look at some typical examples >

Are there any other costs? 

If your application is successful, you will need to pay a £671 administration fee to cover the processing of the application and the legal work by the Scottish Government's solicitors to create your loan offer.

You will also need to pay any fees charged for a property valuation and work by your own solicitor, but these costs can normally be included within the loan. 

Who can apply? 

The property you want to carry the work out on must be in Glasgow City, Argyll and Bute or Perth and Kinross council areas. The following people can apply: 

  • Owners of properties in Council Tax bands A - C, or owners (or permanent occupiers, like partners or children) who receive the qualifying benefits. 
  • Private landlords with no more than two properties to rent that are in Council Tax bands A - C, or whose tenants receive the qualifying benefits. A landlord must be classed as a 'natural person' (meaning they're not registered as a business) and cannot own more than two properties. 

See a list of the qualifying benefits >

What will you need to apply? 

You will need to speak to your mortgage lender and anyone else who holds security on your property, and you may need to get written permission from them to apply. 

You will need a valuation of your property to work out how much you can borrow. You'll also need to supply quotes for the work the loan is paying for, and some other information that will help us determine your eligibility and how much you can borrow.

If you want to apply for an Equity Loan, what should you do next? 

For more information on the HEEPS Equity Loan or to arrange for an application pack to be sent out, call Home Energy Scotland on 0808 808 2282. 

More information

Read the full list of eligible measures

Energy efficiency improvements

At least 55% of the costs of the work must be for energy efficiency improvements. 

  • Repairs that reduce heat loss through the building fabric and/or reduce damp or moisture penetration 
  • Gas, oil or LPG boiler
  • Warm air unit
  • Electrical storage heaters
  • Heating controls
  • Radiator panels
  • Repairs to existing heating systems (if this is more cost effective than a full replacement)
  • Biomass boilers and stoves
  • Heat pumps (air source, ground source and water source)
  • Solar (PV, thermal and PVT)
  • Insulation (including external wall, internal wall, cavity wall, lofts, rooms in roofs, flat roof, under floor, and primary pipework)
  • Draught proofing
  • Hot water tanks
  • Double glazing (new or replacement) and secondary glazing
  • Gas connection (to the mains or to a district heating system)
  • External doors 
  • Low energy lighting
  • Works that improve water efficiency. 

Repairs

No more than 45% of the costs of the work can be used for repairs. 

  • Roof structure, coverings and flashings
  • Chimney stacks and heads (including removal)
  • External wall repairs including finishes
  • Active and passive ventilation systems (including mechanical ventilation in bathrooms and kitchens with no windows) where there is evidence of damp
  • Wet and dry rot
  • Rainwater goods
  • Work to eradicate rising and penetrating damp
  • Work required to make good plaster and/or decoration after a repair
  • Repairs considered essential to allow an approved measure to be carried out, for example if re-wiring is needed to allow electrically powered energy efficiency measures to be installed.

We may consider other repairs not listed here, on a case by case basis, if they can demonstrate that they meet the scheme's criteria. Purely cosmetic improvements with no clear benefit to the property's energy efficiency or condition are not allowed. 

See some typical loan and repayment examples

If your property value increases more than the cap

Your property's estimated value is £100,000 and you borrow £10,000 against this. This means the Scottish Government has a 10% stake in your property. 

If you sell the property in five years for £120,000, the 10% equity stake would now be worth £12,000. However, a commercial loan of £10,000 taken out at 2.5% APR and payable over five years would result in an overall payback of £10,648.  

As the lesser of the two figures is to be paid pack, you would repay £10,648

If your property increases in value below the cap

Your property's estimated value is £100,000 and you borrow £10,000 against this. This means the Scottish Government has a 10% stake in your property. 

If you sell the property in five years for £105,000, the 10% equity stake would now be worth £10,500. A commercial loan of £10,000 taken out at 2.5% APR payable over five years would result in an overall payback of £10,648

As this is below the level set by the cap, you will simply pay back 10% of the sale price - or £10,500

If your property decreases in value

There is no cap if your property decreases in value. You will pay back your equity stake based on the property's new value - even if that means paying back less than you borrowed. 

Your property's value is £80,000. You borrow £20,000 against this. This means the Scottish Government has a 25% stake in your property. 

If you sell your property in five years for £75,000, you will pay back 25% of the sale value - or £18,750

Read the list of qualifying benefits

If any of the permanent occupiers (including you, your children or partner, or your tenants) receive any of the qualifying benefits listed below, then you can apply for the HEEPS Equity Loan. The qualifying benefits are: 

  • Guarantee element of the Pension Credit
  • Attendance Allowance
  • Universal Credit
  • Any of the benefits due to be replaced by Universal Credit, like income-based Job Seekers' Allowance, Child Tax Credits, Working Tax Credits, Employment and Support Allowance, Income Support or Housing Benefit
  • Council Tax Reduction (including the 25% discount for single occupancy)
  • Carer's Allowance
  • Disability Living Allowance or Personal Independence Payment
  • Armed Forces Independence Payment
  • War Disablement Pension
  • Industrial Injuries Disablement Benefit

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Contact Home Energy Scotland

Speak with expert advisors from HES to find out more information - call 0808 808 2282.

Find out more