Spray foam insulation has been around for over 30 years, but it is becoming more popular as a means of insulating attic and roof spaces. However, this can significantly affect your chances of getting a conventional mortgage or equity release lifetime mortgage.
What is spray foam insulation?
Also known as spray foam, or spray polyurethane foam (SPF), this is an alternative to traditional building insulation such as fibreglass, wool or mineral fibre rolls. It can be used to insulate your roof, loft, walls and floor – but it is the roof installation that particularly causes problems for UK mortgage lenders.
The foam is applied in a liquid form using powered sprayers, which then expands and turns to a solid coating. This foam has greater insulating properties than many alternatives.
There are two types of spray foam insulation to choose from:
- Open cell spray foam insulation – this has cells that are not completely encapsulated. This makes the foam a more spongey, softer and more flexible material.
- Closed cell spray foam – cells in this form are completely closed. This means air and moisture cannot get inside the foam, and it sets much more rigidly and is more stable.
Spray foam insulation is more expensive than other forms of insulation material. For example, a client of ours paid almost £4,000 to have the foam professionally applied under the roof of her 3 bedroomed detached home in Lincolnshire, and this roughly matched the initial cost of installing the foam.
It is also suggested that it may cause health issues, as harmful fumes are sometimes given off during installation and could linger afterwards. This can affect those with existing breathing or respiratory complaints, including asthma.
So why is it a problem for mortgage lenders?
By sealing the roof space with this material, air circulation can be restricted to the roof and timbers. This can lead to condensation, which in turn can eventually lead to the rotting of the wooden roof supports.
The closed cell foam version also sets very hard. This can put stresses onto the supporting roof timbers too, causing distortion of the roof itself.
Naturally, these are major concerns to lenders who might be looking to arrange a mortgage on the property for 25 years or more.
Removing the foam material is likely to be more expensive than having it installed in the first place, as the sprayed material penetrates all of the crevices and gaps behind timbers, making them difficult to access and remove. Even having done this, not all lenders will then be happy to accept the property for a mortgage. This is because the damage may already have been done.
Some modern forms of Icynene foam may arguably not cause any damage – but it makes little difference to the mortgage situation until lenders and surveyors start to accept any presented evidence that it is indeed safe to use. This may be some time away yet.
So which lenders will accept spray foam insulation?
As mortgage and equity release advisers, we have access to tools that provide data on the lending criteria of most However, since February 2022 there are now NO equity release lenders who will consider properties with this type of insulation it it is to remain in situ. However, a recent entrant to the Lifetime Mortgage market is prepared to accept properties with the foam on condition that it is professionally removed within 90 days of the loan starting. they require a professional foam removal contractors quotation when the application is submitted by your adviser, and a firm date for the removal needs to be booked before completing the loan arrangements. In this way, the removal can be paid for using some of the monies released.
There are a number of mortgage lenders who may accept it – but all require a referral to them before proceeding, and will usually need Valuer’s approval and be able to meet certain criteria about the type and material used. This can be a problem if you have to pay for a Valuer to visit only to find they reject the property. Some installers will say that open cell foam is safe and accepted by lenders, but in fact both open and closed cell formulation have been seen to cause damage to roof timbers.
So what should you do?
If you are interested in mortgaging a property which has spray foam insulation installed, or are considering buying one (always ask the estate agent whether this is the case) then you need to get advice on what type of mortgage might be available to you. You will need to find out as much about the installation as possible – when was it installed, which type is it (open or closed cell), which firm installed it, whether a guarantee available, the age of the property and the age of the roof, and any other relevant information.
Also, don’t forget that the resale prospects for the property are likely to be badly affected by the installation of spray foam insulation due to the lack of availability of mortgage funding. If problems with the foam get worse in the future, it could be that only a cash buyer will be able to buy your home.
There are very few conventional mortgage lenders who may accept the open cell foam for mortgage purposes, and these tend to be smaller building societies, or specialist lenders who can charge higher interest rates. However, at Andy Wilson Financial Services we have taken the decision not to undertake any further mortgage cases where spray foam is involved. This is due to the potential for spending many hours of unpaid research trying to secure loan facilities, only to see the outcome being an inability to obtain the necessary finance.
For many clients who have contacted us for help, the only solution has been to get the foam professionally removed. This involves a very laborious process to cut the foam away from the roof and timbers where possible and then reapply to the lender. Even then, lenders may decline a new loan as the exposed timbers may now reveal damage by way of wet rot and possible beetle infestation. In come cases, the foam has been sprayed straight on to slates or tiles. The sticky foam cannot be removed, and so a whole new roof covering may be required at substantial cost.
Blog updated October 2023
Source: which.co.uk Oct 2020