Homeowners with spray foam insulation are facing difficulties selling their properties or securing remortgages, as a significant number of major lenders are refusing to lend on homes with this type of insulation in place, the BBC reports.
Around 250,000 UK homes are believed to have spray foam insulation, much of it installed under the previous government’s Green Homes Grant scheme, aimed at improving energy efficiency. However, recent concerns from lenders about the potential risks associated with spray foam insulation have led to some rejecting applications for mortgages and remortgages on affected properties.
Concerns Over Spray Foam Insulation
The primary concern from mortgage providers stems from the risks associated with poorly installed spray foam, which can trap moisture and put roof timbers at risk of decay. This can complicate property valuations, as the condition of roof timbers may not be easily assessed with foam insulation in place. Additionally, there are fears about the insulation’s impact on airflow and potential long-term damage to the roof structure if installed incorrectly.
Several homeowners have shared their experiences, including Wendy Rowe, who struggled to sell her late father’s home after spray foam was installed under the Green Homes Grant. Rowe explained that her father thought the insulation would improve energy efficiency, but after difficulties with lenders and stalled sales, the family was forced to pay thousands to have the foam removed.
Lender Restrictions
The BBC’s investigation found that some of the UK’s largest mortgage providers will not lend on properties with spray foam in the roof space. Lenders such as TSB Bank, Skipton Building Society, Co-operative Bank, and others have confirmed that they either refuse to lend on affected properties or require a specialist inspection before considering any application.
Some lenders, including Lloyds, Nationwide, Barclays, and Santander, will evaluate applications on a case-by-case basis but often request documentation confirming proper installation or an expert report to assess any risks.
The Insulation Manufacturers Association’s Response
The Insulation Manufacturers Association (IMA) has expressed concern over the growing unease surrounding spray foam, particularly in cases where homeowners might be pressured into removing it by unregulated, “cowboy” companies. IMA’s chief executive, Simon Storer, emphasized that spray foam insulation, when properly installed, is beneficial for energy efficiency, and that the “fear” surrounding it is based on a lack of understanding. Storer urged that, like any building work, spray foam should be installed correctly by reputable companies.
Government’s Green Homes Grant Scheme and Its Impact
Under the Green Homes Grant scheme, many pensioners and low-income homeowners, like Wendy Rowe’s father, had spray foam insulation installed at no cost. The initiative covered the full £4,331 installation cost. However, many homeowners, unaware of potential issues with the insulation, are now left facing significant costs to rectify problems.
For homeowners like Gary Wright, who found spray foam in his loft during a mortgage renewal process, the problem is compounded by the high cost of repairs and removal. Wright, who discovered open cell spray foam was installed in 2009, had to renew his mortgage at a higher rate, as he could not afford to fix the issue immediately.
Recommendations and Future Action
The Homeowners Alliance (HOA) has advised against installing spray foam until ongoing issues with lenders and rogue removal services are addressed. The HOA is particularly concerned about vulnerable homeowners being targeted by unregulated companies offering overpriced removal services.
As the situation develops, homeowners with spray foam insulation may need to seek expert advice and ensure that any necessary documentation is in place when applying for a mortgage or attempting to sell their property. The debate over spray foam insulation highlights the need for clear guidance and regulation to ensure both consumer safety and the long-term viability of energy efficiency initiatives.