Lenders snub homes with spray foam
25% of the largest mortgage lenders will not provide loans against property with spray foam insulation, analysis shows.
Spray foam insulation has been marketed as energy-efficient. Also a cost-effective way to seal roof spaces, walls, and floors. However, this can lead to unintended consequences. By trapping moisture, it can cause the wood in the roof to rot over time, compromising the roof’s structural integrity
In addition to the structural risks, there is also the issue of fire safety. This has made lenders nervous.
The BBC (https://www.bbc.co.uk/) contacted the 20 largest lenders in the UK. Five of them, TSB Bank, Skipton Building Society, Co-operative Bank, Principality and equity release lender Aviva – said they did not lend against properties where spray foam is found in the roof space.
The Yorkshire Building Society and Metro Bank were 50/50. They said they would not usually lend where there is a significant amount of spray foam, the research found.
Equity release provider More 2 Life also told the BBC that it will only lend on properties with spray foam where it was fitted as part of an authorised new build and has the necessary documentation.
Other lenders such as Lloyds, Nationwide, Barclays, the NatWest Group and Santander said they consider applications on a case-by-case basis and will take a valuer’s report into account.
It comes amid warnings from property lawyers that homes with spray foam insulation are becoming harder to sell.
Why did the BBC carry out this report?
Lenders snub homes with spray foam
This came about because thousands of vendors are being left unable to sell their homes because spray foam insulation has made them unable to obtain a mortgage, a residential property lawyer has warned.
Simon Nosworthy, head of residential conveyancing at Osbornes Law, dubbed spray foam insulation as the ‘new cladding’ as an increasing number of homeowners are discovering their properties are unsellable without significant repair work.
One seller even had to replace the entire roof structure, the law firm said.
What’s happening in Harlow?
Firstly, there is definitely a problem with some Harlow properties.
Co owner Geoff Flewers explains: “We have come across this in a few properties recently. However, it is not a problem we come up against a lot. I would say that we have had just a handful of problems in the last year. We always ask our vendors now so that they are informed as to potential problems.”
“This is becoming a real crisis for people who have either had foam spray applied to their roof or discovered it is there. It is like combustible cladding as lenders simply won’t give mortgage approval if it is in place. This means having to replace the entire roof in some cases. It’s effectively the new cladding.”
Estimates suggest that up to 300,000 properties across the UK may be affected by spray foam insulation, with many homeowners having taken advantage of government-backed schemes for the work.
Spray foam insulation has been marketed as an energy-efficient and a cost-effective way to seal roof spaces, walls, and floors. However, this can lead to unintended consequences. By trapping moisture, it can cause the wood in the roof to rot over time, compromising the roof’s structural integrity
In addition to the structural risks, there is also the issue of fire safety. Polyurethane spray foam, commonly used in these installations, is a combustible material. It can only withstand a small flame for a few seconds before igniting, accelerating the spread of fire in the event of an emergency. Although loft spaces are typically uninhabited, fires involving spray foam insulation can quickly escalate, endangering not just the property but also neighbouring homes.
Conclusion
Lenders snub homes with spray foam
Geoff Flewers continued: “With the release of the Grenfell Tower inquiry report, fire safety is paramount.
“We must be vigilant about the risks posed by spray foam insulation and ensure that homeowners are fully informed. If you looking to purchase a home, it is vital to work with a professional surveyor who can assess the presence of spray foam insulation. Early detection can help mitigate the risk of future damage and ensure you are making an informed decision.
“Spray foam insulation is a significant modification to any property, and homeowners need to be fully aware of the potential risks before installing it. The short-term benefits of heat retention are outweighed by the long-term consequences, including structural damage, fire hazards, and financial implications.”