Spray Foam Insulation: Mortgage Challenges

Landlords who install spray foam insulation in the lofts of rental homes have trouble remortgaging or selling the properties.

Many major mortgage lenders refuse to lend against homes with spray foam insulation, while health and safety watchdogs warn that the coating can reduce roofspace ventilation, leading to humidity and dampness and putting roof timbers at risk of decay.

Spray foam insulation is a liquid foam sprayed onto walls or the underside of a building’s roof covering. The foam sets to a solid layer, which makes a barrier to air and water.

The Royal Institution of Chartered Surveyors says if a surveyor encounters spray foam insulation during an inspection, the property value could be reduced, and the insulation could make the home unmortgageable.

The trade body, the National Insulation Association, is striving to resolve the problem with surveyors and lenders.

Green Homes Grant Upset

Many landlords and homeowners are angry because spray foam insulation is more expensive than most other forms of insulation, and they were encouraged to install foam as part of the government’s Green Homes Grant initiative.

Spray foam insulation costs an average of £2,500 to install in a three-bedroom semi-detached home, compared with £600 to £1,100 for professional installation of other products.

Around 250,000 homes are thought to have spray foam insulation.

The Health and Safety Executive has recently assessed potential risks when spray foam is applied to the inside of a loft.

Meanwhile, the BBC has contacted the 20 largest mortgage lenders about lending on homes with spray foam insulation.

Lenders Blacklist Homes with Spray Foam

Five have a blanket ban on lending against homes with spray foam insulation in the roofspace: TSB Bank, Skipton Building Society, Co-operative Bank, Principality, and equity release lender Aviva.

The Yorkshire Building Society and Metro Bank do not usually lend where there is a significant amount of spray foam in the loft.

Equity release provider More 2 Life lends on properties with spray foam installed in a newly built property with extensive certification.

Other lenders, such as Lloyds, Nationwide, Barclays and Santander, will consider lending against a home with spray foam insulation on a case-by-case basis.

The Insulation Manufacturers’ Association has tried to play down the potential risks of spray foam insulation.

What to Do If Your Home Has Spray Foam Insulation

“Spray foam insulation is an important and effective method of improving the energy efficiency of our homes and buildings, but as with many construction improvements, installation must be done in accordance with all necessary approvals and relevant permissions,” says the IMA website.

If you are a landlord or homeowner with spray foam insulation installed, you should:

• Check that you have any relevant documentation from the installer, such as a product certificate, warranty, before-and-after photos, and a survey.
• Contact the installer or manufacturer to see if they offer a free check to confirm the foam is performing as expected.
• If you cannot get a free check, consider an independent assessment by a qualified spray foam surveyor.