An estimated 15 million homes in England and Wales need energy efficiency improvements – but property professionals are concerned that cash is being wasted on spray foam insulation, described as the “kiss of death” for homeowners who apply for mortgages or equity release loans for properties with this type of green treatment.
Around 250,000 UK homes have spray foam insulation, where foam is applied using powered sprayers, which then expands and turns to a solid coating to insulate roofs, lofts, walls and floors.
The problem comes when it is used in roofs and lofts, where it has a tendency over time for the foam to trap moisture around wooden joints, which leads to rotting. The hardened foam can also warp wooden beams.
This has led to many mortgage and equity release firms refusing to lend to homes with this type of loft insulation.
A surveyor dealing with such a property “will in all likelihood wish to recommend a cautious approach and recommend provision for early renewal of the roof and the removal of the [spray foam] insulation,” said a joint report looking at the problem by the Property Care Association and the Residential Property Surveyors Association in December.
It added the only way a valuer can be sure this type of insulation has not damaged a roof is through a detailed series of tests that “will often result in partial or full removal, [causing] irreparable damage to, [the] insulation or roof coverings”.
There are two types of spray foam insulation, open cell spray foam insulation and closed cell spray foam. The biggest problem lies around closed cell spray foam as it restricts air circulation among timbers.
But the report adds that water vapour can become trapped under open cell spray foam, causing wood to rot.
Adding spray foam insulation to a typical home costs around £3,000 and around £5,000 to remove, says financial advisor Andy Wilson, who has dealt with several such properties.
Wilson says: “This type of insulation is a kiss of death for people looking for a mortgage or an equity release mortgage, as very few lenders will take the risk on a property of this type.
“The government’s Green Homes Grant covers this type of insulation, but does not warn of its dangers. When I contacted the relevant department, I was told it would not endorse any particular type of insulation on the market. A case of buyer beware.”
The Department for Business, Energy & Industrial Strategy launched its £2bn Green Homes Grant voucher scheme in September 2020, which has been extended to end next month.
It says the plan will help 600,000 households save up to £600 on their energy bills by granting energy-saving vouchers of up to £5,000.
A key part of the government’s overall plan for the country to slash emissions by 78% in 2035 and hit net zero by 2050, is to upgrade the energy efficiency of the UK’s 29 million homes.
The Department for Business, Energy and Industrial Strategy says it “is aware that the presence of spray foam could potentially restrict property finance”.
It adds that the Business department along with the Department for Levelling Up, Housing and Communities “are looking at ways to support industry in resolving the issue”.
The Business department recommends that householders considering insulating their lofts should use the TrustMark website, a government-endorsed scheme for trusted traders.
It says that traders on this site have to comply with PAS 2035 energy-efficient retrofit standards launched in 2019.
A Business department spokesperson added: “The Green Homes Grant was a temporary scheme available to homeowners in England who chose to apply, and designed as a short-term economic stimulus.
“We are investing almost £6.6 billion [over the course of this parliament] to support people to install energy efficiency measures across the country.”
The government says it runs several schemes that help households meet the cost of insulation, such as Social Housing Decarbonisation, Green Homes Grant Local Authority Delivery and Sustainable Warmth.
Spray foam insulation was launched in the US about 30 years ago and was introduced in the UK a decade ago, says Wilson.
But he adds, it has become increasingly popular in the last five years, as an alternative to traditional building insulation such as fibreglass, wool or mineral fibre rolls.
Last week, an estimated 15 million homes in England and Wales were said to need energy efficiency improvements — with a high proportion of these being older properties and detached homes, according to data from Halifax.
Analysis by the lender suggests that just 10% of pre-1900 homes meet the EPC ‘C’ standard, the current government minimum standard for new build properties.
Improved construction methods mean that the vast majority of modern housing is far more energy efficient. The survey by Halifax shows that the average EPC rating for homes build since 2012 is ‘B’ or higher.
This compares to an average rating of ‘D’ across the housing stock in England and Wales is D. For the 4.2m homes built before 1900 the average EPC rating is only ‘E’.
Halifax’s data suggests that 60% of the homes in England and Wales need energy improvements to meet a minimum EPC rating of ‘C’.
