Has spray foam loft insulation made 250,000 homes hard to sell?

After their monthly utility bills doubled to £500 this year, retirees Rudi Szczerba and his wife Pat wanted to act quickly to insulate their drafty terrace house.

It seemed like perfect timing when a salesperson called them cold about a type of attic insulation called spray foam.

Promising a 40 percent cut in their bills, Rudi, 72, said the decision to have the isolation seemed like a no-brainer.

The foam was installed in September and cost them £3,800. However, if utility bills remain high, they could recoup the cost in less than five years in lower bills.

It’s a decision that about a quarter of a million households have made over the past ten years. But what few realized is that the spray foam comes with a possible sting in the tail.

Because the industry is unregulated, there is growing concern among lenders that cowboy firms have not used the correct type of foam or have failed to verify that a property is suitable.

As a result, homeowners are beginning to find it difficult to re-mortgage, unlock their home’s equity — or even sell it.

It’s a scenario that Rudi and Pat, 75, have now discovered. The couple, who both worked for Polaroid before retiring, wanted to free up £25,000 in equity from their recently improved house at the end of a £1 million terrace in Knebworth, Hertfordshire.

With no children to pass their wealth on, the couple planned to donate the money to a lifelong friend in ill health to help with his finances.

But when they learned about the spray foam, their stock release advisor told them there was no way for stock release lenders to lend them. They say they have not heard this from the person who installed the spray foam.

Life-release mortgages are available to homeowners 55 and older and have become popular in recent years.

A record £3.1 billion in real estate was withdrawn in the first half of the year, according to a trade association.

They allow homeowners to get a tax-free loan while remaining owners. The money is paid back if the house is sold, the borrower dies or goes into care. But those who use spray foam to insulate their homes are being frozen out of the market.

No home equity loan allows for spray foam insulation applied after a home is built. Only one lender, More2life, will consider whether it is installed during construction and meets strict quality criteria.

Mark Gregory, chief executive of Equity Release Supermarket, says: “We think any spray foam installation company should make homeowners aware that if they are considering releasing stock, they are not eligible for a lifetime mortgage at this time.”

Rudi and Pat are just one of 250,000 households that have used polyurethane foam to insulate their homes. Before the scheme was repealed in March 2021, spray foam was a type of insulation that could be installed for green homes with a government subsidy. It can be used to insulate attics, roofs, walls and floors to improve energy efficiency.

Mortgage fears: Lenders may be concerned that cowboy companies haven’t used the right type of foam

But there’s no industry code of practice, and installers aren’t required to tell homeowners that doing so could hurt their chances of getting a mortgage or stock release.

Lenders are concerned that some installers have not used the correct foam or checked that it is suitable for the house, which can result in rotten beams and an expensive bill to replace the roofing material.

There is also no easy way for a surveyor, who works for a mortgage lender, to see if the timbers are in good condition after being sprayed. This can make a house unliable and unsaleable – as Lorna Rolfe discovered.

She paid £5,000 to have foam installed in 2020 after seeing an ad on Facebook. But when Lorna, 65, came to sell her home near Dartmoor this summer, her buyer’s bank refused the mortgage after the surveyor discovered the foam insulation in the loft.

To prevent the sale from failing, Lorna, an occupational therapist, paid £4,000 to have it removed.

“I had to sell my house to get closer to my 90-year-old uncle who moved into a care home,” Lorna says.

“The whole thing has caused me a lot of stress and anxiety. I also found that the foam was flammable and toxic and sprayed directly onto electrical cables. My life was on the line all the time.’

Claims management firm Hydrogard Legal Services says it is pursuing more than 250 claims from frail or elderly homeowners who were targeted by cold callers and failed to tell them the foam could keep them from selling their home.

Rudi and Pat are talking to a lender who has promised to look into the guarantees their installer has given. If they are rejected, the installer has promised to remove the foam and refund the money.

Kunle Barker, of architect and design firm Barker-Walsh, says: “If polyurethane foam is not applied correctly, it may not provide proper ventilation, which can cause the roof timbers to rot.”

Properly installed spray foam allows the roof to breathe, Kunle says, and prevents moisture from building up.

Homeowners are advised to only work with an installer who completes a report on the condition of the roof, the felt beneath it, and the risk of condensation, called a hydrothermal assessment.

And while this paperwork does increase a homeowner’s chance of selling the property or gaining equity, it’s not a guarantee.

moneymail@dailymail.co.uk