4. Feedback on the Equity Loan process and offer
Loan holders provided feedback on their experiences with the Equity Loan pilot, including how they found out about the scheme, their views on the loan terms and conditions, and suggested improvements to the process.
Discovery of the pilot
Loan holders learned about the pilot through a variety of channels. The most common route was through word of mouth (Figure 4.1). Nearly a quarter of loan holders (9, 24%) described situations where friends, family, colleagues or members of the local community informed them about the pilot.
Seven loan holders discovered the pilot online, either through targeted adverts, a Google search or on the SG's website and social media.
Several loan holders noted that they found out about the pilot through contact with other agencies with connections to the pilot:
- five found out through Care & Repair;
- four from a local housing association;
- four from their local authority;
- three from the Energy Saving Trust;
- two from Home Energy Scotland.
Two read about the scheme in their local newspaper, and two said they had been sent a leaflet promoting the pilot.
A common theme in responses to this question was that loan holders were actively searching for financial support to fund repairs and energy efficiency improvements to their home when they discovered the pilot.
What loan holders liked about the Equity Loan offer
Access to capital
The majority of homeowners described the value of the Equity Loan in terms of offering capital which enabled important improvement work to be carried out. Many said the Equity Loan provided finance which they did not have, or ensured they could retain any savings for security.
"It made changing the heating viable, affordable. She [mother] wouldn't have had the funds to do it herself. She didn't have a spare five grand lying about in the bank, even though she saw the need to change the heating, which is why she went to the scheme. I mean, if she hadn't seen the scheme, she wouldn't have had the funds available. So thumbs up to the Scottish Government for shelling out. Overall, a very good scheme, well worth doing."
"I don't know how long I'm going to live - the Equity Loan … would be paid back in the sale of the house which will probably be when I pass on - I felt it would be as well to do that to keep the few pennies that I had - I don't know what other repairs and things I will need to do to the house."
Attractive and competitive terms
Participants reported that the Equity Loan pilot helped them avoid seeking a private loan to fund improvement work, which was described as a less attractive prospect, with less favourable terms.
"It let me get the means to get the work done. Other than that, I probably would have been looking at a loan, but not working and being retired, I wasn't too keen on that."
"At the time, we only had one wage coming into the house. So it was difficult to do without extending our outgoings. The scheme is really beneficial…it would have been tougher to go get a bank loan."
"It's very attractive - a much better deal than other home Equity Loan options that are available commercially."
Endorsed by wider family
Within families, homeowners mentioned discussing the pilot with loved ones who would ultimately become owners of the property through inheritance. They said responses were positive, even if family members were initially cautious.
"I did check it with my family to see how they felt - when I pass away the house goes to them - they were quite delighted."
"We put it to the family - we've got 3 children with their families and they said 'its entirely up to yourselves and don't worry about us - do what's right for you' and this sounds a good way of getting the work done without it having a big impact on our finances."
"I was very dubious when mum said, this is what she wanted to do, and I thought, you know, Equity Loan, stealing your money, taking all the house value, but no, not at all, I found it very fair… they weren't money grabbing. It seemed very much a case of for the benefit of the homeowner rather than the benefit of the Government."
Straightforward, helpful support for applicants
A small number of homeowners said the loan application process had been easy to participate in. Others said that the terms of the loan put them at ease.
"It was quite simple, it was straightforward and it did exactly what I needed it to do because we were asset-rich but cash-poor."
"I thought it was very user-friendly in the terms and conditions."
Some highlighted the value of the support they had received in the application process (this is explored in more detail later in the report).
The applicant journey and process of obtaining an Equity Loan
Feedback on timescales
The Equity Loan scheme was a pilot, providing opportunities for development and application of learning. For context, in this section, householder's feedback is provided with detail about when they received a loan; as some of the challenges identified early on in the pilot were addressed as it evolved.
Six loan holders did not identify the need for any improvement in the process because they felt it had worked well. These represented three different local authority areas and timescales between 2017 and 2021, including properties with complex lists of repairs and improvements. There was no clear pattern linked to this positive experience.
On potential changes to the Equity Loan scheme, the most common improvement suggested by people was to reduce the time involved in the process, mentioned by fourteen respondents (just over one third). A further seven specifically highlighted delays with legal processes. Combined, this means that just over half of loan holders felt there was room for improvement in timescales associated with the Equity Loan.
A small number acknowledged that the delays they experienced were due to the pandemic; however households across the period from 2018-2021 cited time delays as a problem. As with the positive comments, there is no pattern linking issues to geographic location or the scale of work.
Some loan holders felt that the pilot's new status had led to inevitable teething problems and that the delays they had experienced had not been excessive. A lack of knowledge about the pilot among local lawyers was one factor that loan holders felt had contributed to extended timescales.
"You have to have the lawyer approve everything and obviously because it was a new scheme the people that we used weren't really aware of the ins and outs of it and that's where we ended up with a big delay and quite a bit of hassle… I would make sure that you had approved lawyers, approved law companies that knew exactly what the process was."
[Loan holder received Equity Loan funds in February 2018]
Some described frustrations with the SG's externally contracted lawyers. The issues described involved poor communication and lengthy waits for action.
A small number of participants said they had incurred unexpected costs because of additional legal work they had to arrange. These loan holders described confusion about how this aspect of the pilot operated.
"There was confusion. The scheme was described to us along the lines of the only initial outlay you'll have will be for the survey, all your legal fees will be wrapped up in the loan that you get. But lawyers didn't seem to be operating on that assumption."
[Loan holder received Equity Loan funds in February 2018]
"And we initially needed a wee bit extra work and we were told that the loan would just get added on to it, we were guaranteed that...he had assured us that it would go onto the loan, and it didn't. We had to then go and find that money to pay more lawyer fees, which we didn't know about…it was extra lawyers' fees …and the Scottish Government only paid for the initial paperwork. And I tried to contact that guy umpteen times, and he just stopped calling me back."
[Loan holder received Equity Loan funds in March 2019]
While some households reflected that legal processes for loans and property need to be done properly, others felt there was an excessive degree of complexity.
"We had to get a solicitor to read over the paperwork. And we had to shell out quite a bit of money as well because she had to spend hours on the paperwork, looking at the contract. She said she'd never seen an agreement like it in all her working days. She said it's more akin to a multimillion pound loan or something when the loan was actually for like five thousand pounds or something. So it was incredibly complex, and I couldn't understand a lot of it to be honest."
[Loan holder received Equity Loan funds in October 2020]
It was most common for people to report lags in day-to-day communication, with this accumulating to create a longer overall delay. While expressing these views, most loan holders emphasised that overall they still believe in the positive value of the scheme, but that element of the process requires streamlining.
A small number of households reflected that the delays affected timescales for improvement work and in some cases, work had to be completed in less favourable weather conditions. This led to additional expense as costs had gone up, which caused stress.
"I ended up getting windows in when it was snowing in January because of all the delays and that was I think down to the unknown of it being a pilot scheme and no one knew what they were doing."
[Loan holder received Equity Loan funds in March 2018]
"It affected quotes, it affected costs which I had to bear, extra costs… The work was priced and then a year later...I mean, it didn't affect it an awful lot because the contractors were very good about it. But there was a slight increase in costs, which I paid myself."
[Loan holder received Equity Loan funds in August 2019]
In some cases, delays led to people taking their own action. One person reported making alternative temporary financial arrangements, in order to get around the delays and ensure the process stayed on track.
"If my Mum didn't have me who had some money in the bank to start the process, she would have been waiting a lot longer to get the work done to get the heating she needed. And it's a lot…which I was happy to do. If she was an 80 year old who had seen it in the paper or in an ad on TV and thought that's a good idea, there's no way she would cope with the process."
[Loan holder received Equity Loan funds in July 2019]
A small number of loan holders observed that the complexity of the process and the difficult nature of communication would have been problematic for people who were less capable.
The delays and complexity of the process proved stressful for a small number of loan holders, who said their experiences affected their willingness to recommend the scheme to others.
"It was a hassle from start to finish. I wouldn't recommend it to anybody."
[Loan holder received Equity Loan funds in March 2021]
"I wouldn't do it again. Me and my wife wouldn't go through that again. It was a very, very stressful thing."
[Loan holder received Equity Loan funds in October 2019]
Some households were positive about the applicant journey, saying that their experience of the process had been good.
"I would say everything worked very well - some people might have a problem understanding it, especially when it's basically something for nothing, but I can't think of anything negative at all about it."
[Loan holder received Equity Loan funds in March 2018]
The loan offer period
The loan offer period refers to the timeframe after the loan is officially offered in which the works on the property must be completed. Loan holders are also expected to submit invoices and have a site visit from their Care & Repair officer within this period.
When the Equity Loan pilot began in 2017, the loan offer period was 3 months. This was extended to 12 months during the COVID-19 pandemic, and it has now been changed to 6 months. However, the SG have granted extensions in cases where the works could not be completed in time due to exceptional circumstances.
Opinions on whether the original three month loan offer period was long enough were mixed. More than half of the loan holders felt that the three month limit was not long enough for all the steps to be carried out. However, others noted that in their experience, the three month timeframe was sufficient for their works to be completed and inspected.
Some of those who reasoned that the timeframe should be extended had experienced significant delays throughout the process which meant that their works could not be completed within three months. Delays occurred as a result of several different factors including:
- restrictions put in place as a result of the COVID-19 pandemic meant surveyors and tradesmen could not enter properties to complete evaluations or undertake any works;
- local contractors not having availability to undertake the works;
- raw materials not being available;
- delays due to legal complications, e.g. title deeds and multi-tenured blocks with shared ownership.
One loan holder described communication issues between the different agencies involved.
"We had to get an extension because the paperwork took so long. Our building society weren't keen on it happening - they hummed and hawed and we couldn't get an answer out of them. And we needed their approval. And the solicitor came in and she had to negotiate and eventually they said yes. So we had to get an extension and we had to have the builders, the guy who was doing the solar panels, he had to be ready to do the work as soon as."
A common theme among loan holders who took part in the pilot prior to the COVID-19 pandemic was that, although the three month period was adequate at the time, they no longer felt this would be long due to current supply chain challenges such as high demand, a lack of skilled workers and a 'backlog of work after lockdown'.
One participant felt strongly that the loan offer period should be contingent on different factors, for example the type of works being completed and the time of year that the Equity Loan is approved.
"In the West of Scotland, a new roof is totally and absolutely dependent on the weather. Imagine the offer of loan fell in September or October and you get a bad spell of weather. They would just not touch that roof. I've been in the building trade all my life and I would not touch a roof until we came to March or April. So I think it may have to be that someone can make a judgement on the ground to say, it's a roof and the offer of loan has landed in September - they should get a year to get that sorted out, or they should get six months to get it in place. That's something that has to be taken into account."
A few loan holders described feeling worried when they first learned about the three month timeframe, fearing they would not be able to get everything in place within that timescale.
However, some loan holders felt that the three month period was sufficient and they faced no issues in getting their works completed within that timeframe.
Percentage split between repairs and energy efficiency measures
One of the terms of the Equity Loan states that up to 45% of the loan can be spent on repairs, but the remaining 55% must be spent on installing energy efficiency measures.
Many loan holders were unaware of this term, either as it was not applicable to them (having not used the loan to pay for repairs), or having no recollection of this condition of the loan. Those who were aware of the percentage split term described it as 'decent', 'fine' and 'reasonable'.
Two loan holders felt that the percentage allowance for repairs should be increased.
A few loan holders were unsure whether the works they had done would qualify as a repair or if they would be defined as entirely new measures being installed.
Support provided by Home Energy Scotland (HES)
Homes Energy Scotland (HES) is a support and advice service delivered by the Energy Saving Trust. HES aims to support people in Scotland to create warmer homes, reduce energy bills and help tackle climate change. Applicants were able to contact HES for support and advice about the Equity Loan throughout the process,
While loan holders remembered receiving support, this was often linked to a specific individual, and they had limited recollection of which organisation that person was employed by. The few comments specifically about HES were positive.
Not every loan holder felt supported throughout the process. Some noted that the availability of support from HES had not been made clear to them.
"They weren't really in contact with me. I didn't really have any contact with them. If they were meant to contact me, they didn't."
"I have to say I got a little bit confused about who to speak to, I think there was maybe a change of personnel at one point and nobody had let me know."
"I think the feedback I got from them was that's outwith the Energy Saving Trust process, because that was to do with the government lawyers, so there was a split between what the Energy Saving Trust could do."
One person could not recall being offered any support at all.
Support provided by Care & Repair
At the beginning of the pilot, the SG subcontracted Care & Repair, an organisation which specialises in offering household works and repairs to older and disabled residents, to provide support to loan holders throughout the process. Care & Repair Officers were assigned to each case (where the applicant had agreed to it) and provided support such as responding to queries, assisting with paperwork, recommending contractors and inspecting the works once completed.
A key theme in conversations with loan holders about their journey through the process from application to completion was the value of and positive experiences with the support received from Care & Repair.
Almost all of those who had experienced support from Care & Repair were positive about it. They described various ways in which they had felt supported, from form-filling, to liaison with other organisations, and overall project management. Key themes in the feedback were that people felt they had someone to turn to who they could trust to guide them through the process.
"It worked really well that you had people come out and explain what was going on, help with the application form - all of that was pretty straightforward."
"They were really helpful. Everything was done. If I had questions I could just pick up the phone and talk to somebody. It was excellent….it put my mind at rest because I wasn't sure, you know, am I doing the right thing? But she said, anytime you've got a problem, just phone me up and ask me. Everybody I dealt with was really good, and really nice."
"He [Care & Repair Officer] made it possible for many people. It was a huge help. He kept us on the right track and he dealt directly with Edinburgh and the contractors. He kept on top of that. He himself commented that he was frustrated with delays and having to apologise - there was frustration there on his part. He was very professional. Especially for old folks on their own who couldn't cope with the bureaucracy - he smoothed that process."
"He [Care & Repair Officer] was fantastic throughout the whole process. And was there to answer any questions just as soon as I had them. He had an answer to everything. He cleared up a lot of things that might have ended up causing confusion."
The positive comments about support centred on how Care & Repair staff had performed their roles; they were described as responsive, efficient, well-informed, active in seeking answers where needed, patient, thorough and reassuring.
Two respondents had not had a good experience with Care & Repair. In one case, a staff member had been subcontracted elsewhere and communication and support ceased; the other said they could not get any contact from Care & Repair despite repeated attempts.
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