LENDERS are routinely rejecting mortgage applications for houses with spray foam insulation in the roof, the Sun has learned.
Some banks are now refusing to lend to anyone buying a home with the material, while others will only lend if buyers fork out thousands of pounds for a detailed survey which proves it meets stringent criteria.
And estate agents, brokers and surveyors all said they have seen an increase in the number of mortgage applications being rejected because of the presence of spray foam.
This could make the roughly 250,000 homes with the energy-saving method virtually unsalable as potential buyers may not be able to secure a loan.
Spray foam has been in use for decades as a way of retaining heat or to stabilise a failing roof covering.
The method commonly involves spraying a liquid foam onto the inside of the roof, which then sets to form a hard layer of insulation.
However, there are risks attached as it can cause structural damage if it’s not installed correctly.
For example, the foam can trap condensation and cause damp, which can lead to rotting roof timbers.
The spray foam industry is also unregulated, so there’s not really been a way to tell the difference between “good” and “bad” installations up to now.
Because of the risks, banks have become increasingly wary of lending on homes that have it.
But The Sun now understands some lenders are automatically rejecting applications, even where the spray foam isn’t currently causing an issue.
Every lender we spoke to said where a house has spray foam, they either would not lend at all or would only lend in very specific circumstances.
HSBC told The Sun it currently does not lend on any properties with spray foam insulation.
It said this is because of the potential for moisture to be trapped against roof timbers and for structural defects to remain concealed.
Barclays said it won’t lend on homes with “closed cell” spray foam – the most common type – if it was installed to stabilise a failing roof cover, which is a popular reason for using the material.
In other cases, Barclays said it requires a detailed structural survey before it will consider lending.
Natwest and Santander also said they now require a detailed structural survey.
Full structural surveys typically cost more than £1,500, according to the Homeowners Association.
Nationwide said it requires documented evidence that spray foam was installed correctly before it will lend, which can be difficult to provide.
Meanwhile, Virgin Money said it will reject applications for properties where spray foam is within wall space, around structural timbers or was installed as a solution for a failing roof.
Trudy Woolf, sustainability director at Legal & General Surveying Services, said her firm has seen an increase in the number of customers who are suffering mortgage complications due to spray foam.
“A home with spray foam insulation isn’t necessarily a definite ‘no’ from lenders, but many have recently toughened their stance on it,” she explained.
“Some lenders now ask for the relevant documentation on the works while others will ask for the spray foam to be removed before lending, which can be extremely costly and time-intensive for the homeowner.“
It can cost up to £4,000 to remove spray foam from typical three-bedroom house, according to insulation firm Insulation Advisor.
David Hollingworth, director at L&C Mortgages, added that the issue has been cropping up more recently as more homes had spray foam installed over time, and those owners may now be looking to sell.
“As a result, it’s likely that more valuations will be picking up on issues, so it feels likely that this will be more prevalent,” he said.
And spray foam companies have reported seeing higher volumes of business over the last year.
Ollie Creevy, managing director of Insulation Advisor, said: “We’ve noticed homeowners are often encountering difficulties selling their homes with spray foam insulation, and we’ve recently received calls from people wanting to remove it to make their homes more marketable.”
What should I do if I have spray foam?
If you already have spray foam insulation and you’re not sure whether it’s been done correctly, the best option is to remove it entirely as it’s difficult to fix or alter once it’s already set.
If you can afford it, experts recommend getting professionals in to do the job as spray foam is notoriously difficult to remove and you may end up doing more damage to your home.
According to Mr Creevy, paying for removal from a typical three-bed home could cost anywhere between £3,000 and £4,000, depending on how much foam there is to dispose of.
Shop around to make sure you’re getting a good rate as there are plenty of firms offering this service.
Remember you’ll need to pay for the disposal of the spray foam as part of the cost.
If you’re considering getting spray foam installed in your home, it’s a good idea to get independent advice to ensure you understand the risks involved and are using a reputable firm.
Ms Woolf said: “I’d urge anyone considering it to consult an independent mortgage adviser before signing on any dotted lines.
“What may seem a quick fix now could cause significant, expensive and dangerous problems down the line.”
The Royal Institute of Chartered Surveyors (RICS) released a free guide earlier this year for homeowners who are concerned about spray foam or are considering installing it.
You can download a copy of the guide at www.rics.org/news-insights/rics-release-new-spray-foam-consumer-guide.
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