- Spray foam insulation is quick to install and promises to lower energy bills.
- But this can cause problems with re-mortgaging, selling and unlocking the issue of shares.
- Lenders are concerned that cowboy firms have used the wrong type of foam.
After their monthly electricity bill doubled to £500 this year, pensioners Rudi Scherba and his wife Pat decided to act quickly to insulate their drafty terraced house.
It seemed like the perfect moment when the salesman coldly called them about a type of loft insulation called spray foam.
After promising a 40 percent cut in their bills, Rudy, 72, said the decision to go into lockdown seemed “a no-brainer”.
Savings: Spray foam insulation can be installed quickly and promises significant energy bill savings.
The foam was installed in September at a cost of £3,800. However, if electricity bills remain high, they will pay off with lower bills in less than five years.
This decision has also been made by about a quarter of a million households over the past decade. But few realized that the sprayed foam could potentially sting the tail.
As the industry is unregulated, there is growing concern among lenders that cowboy firms weren’t using the right type of foam or checking if the property was right.
As a result, it is becoming increasingly difficult for homeowners to remortgage, release capital from their homes, or even sell them.
This is a scenario that Rudy and Pat, 75, have already discovered. The couple, who worked for Polaroid before retiring, wanted to free up £25,000 from their newly improved £1m end terrace home in Knebworth, Hertfordshire.
With no children to pass on their property to, the couple planned to gift money to their longtime friend in ill health to help with his finances.
But after hearing about the aerosol foam, their equity advisor told them that no equity lender could lend them a loan. They say they weren’t told this by the person who installed the spray foam.
Lifetime equity mortgages are available to homeowners aged 55 and over and have become popular in recent years.
A record fortune of £3.1bn was seized in the first half of the year, according to the trade body.
They allow homeowners to get a tax-free loan while still being owners. The money is returned if the house is sold, the borrower dies or comes into custody. But those who use polyurethane foam to insulate their homes are being squeezed out of the market.
No equity loan permits spray foam insulation that was installed after the property was built. Only one lender, More2life, will consider it if it was installed during construction and meets strict quality criteria.
Mark Gregory, chief executive of the Equity Release Supermarket, says: “We believe that any spray foam company should inform homeowners that if they consider a share issue, the foam will currently disqualify them from a lifetime mortgage. “.
Rudy and Pat are just one of 250,000 households that have used sprayed polyurethane foam to insulate their homes. Before the scheme was canceled in March 2021, styrofoam was one type of insulation that could be installed through a government grant for green homes. It can be used to insulate attics, roofs, walls and floors for energy efficiency.
Mortgage Concerns: Lenders may fear that cowboy firms have used the wrong type of foam.
But there is no industry set of rules, and installers are not required to tell homeowners that doing so could hurt their chances of getting a mortgage or equity exemption.
Lenders are concerned that some installers didn’t use the correct foam or didn’t check if it was right for the home, which can lead to rotten beams and an expensive replacement roofing bill.
There is also no easy way for a surveyor working for a mortgage lender to see the roof beams to make sure they are in good condition after spraying. This can make the house unmortgaged and unsellable, as Lorna Rolfe found out.
She paid £5,000 to have the styrofoam installed in 2020 after seeing a Facebook ad. But when Lorna, 65, came to sell her home near Dartmoor this summer, her buyer’s bank denied a mortgage after a surveyor noticed foam insulation in the attic.
To prevent the sale from failing, Lorna, an occupational therapist, paid £4,000 to have it removed.
“I needed to sell my house in order to move closer to my 90-year-old uncle who moved into a nursing home,” says Lorna.
“All this caused me a lot of stress and anxiety. I also learned that foam is highly flammable, toxic and sprayed directly onto electrical cables. My life was in danger all the time.”
Claims management firm Hydrogard Legal Services says it’s handling more than 250 claims from vulnerable or older homeowners who have been the victims of cold calls and haven’t been told foam could stop them from selling their home.
Rudy and Pat negotiate with a lender who has agreed to review the guarantees provided by their installer. If they were refused, the installer promised to remove the foam and return the money.
Kunle Barker of Barker-Walsh Architects and Design Studio says, “If spray foam is not installed properly, it may not provide adequate ventilation, which can cause roof logs to rot.”
Properly installed foam allows the roof to breathe and prevents moisture from building up, Kunle says.
Homeowners are advised to only work with an installer who produces a report on the condition of the roof, the felt under it, and the risk of condensation, known as a hydrothermal assessment.
And while this paperwork improves the homeowner’s chances of selling the property or getting equity relief, it is not a guarantee.
Credit: www.thisismoney.co.uk /