One of perhaps the most common methods over the years has been spray foam installation, and there has definitely been something of a resurgence in the number of firms offering this service to homeowners.
However, this, as we now know, can cause more problems for the homeowner, not least in terms of being able to mortgage the property in the future.
This has certainly been a growing issue in the later life lending market where advisers and their clients are coming up against a lending community which is less than enamoured with spray foam-covered properties.
Lender reluctance
There criticism from the equity release market especially those who are concerned about what currently amounts to an almost blanket ban on lending on properties with spray foam. Even when there are no issues, where perhaps it has been rectified, amended and fixed correctly and there’s paperwork to show this, most lenders are still not happy to lend.
The biggest challenge is arguably that the sector is not widely regulated and while there are some spray foam installers who adhere to rigorous standards, it would appear others take a more informal approach. Incorrectly installed spray foam restricts the air flow thus causing condensation to build up and ultimately wood to rot, which is naturally a concern for any organisation offering secured lending.
That is unfortunate because we currently have a situation where lenders have come to the conclusion that all spray foam is bad, and therefore, the property can’t be considered as mortgageable until something is done about it.
That ‘something’ is that the spray foam is removed, although I’m led to believe that guidance from some surveying businesses encourage the removal of the whole roof, not just the foam itself, before they should be considered by lenders.
A nuanced approach
Again, I think we have to be much more measured and nuanced in this, because while I fully acknowledge that some installers are of the ‘cowboy’ variety, preying on vulnerable, often older, customers and using foam which is likely to cause more damage than good, there are others which are not like this.
Royal Institution of Chartered Surveyors (RICS) recently launched a spray foam insulation guide for consumers and, as a first port of call for advisers who may be dealing with such cases, I would have a look at this because, as mentioned, it is a much more complicated matter than many consider it to be.
Indeed, you might have come across clients who are considering spray foam installation as a means to insulate the house and potentially keep energy bills lower. However, it should be a careful consideration as not all the claims used by the installers are what they seem. You might be able to point them in a different direction especially if this approach to spray foam continues.
Not all spray foam homes the same
However, we need an approach where not every single property with spray foam is considered too much of a risk to lend on. Where it’s been done properly, where it’s up to recognised standards, where it does not compromise the structural integrity of the home, where it is achieving what the installers say it is, then more lenders need to be lending on such properties.
I know that the Equity Release Council are looking into this issue specifically at the moment, and I would hope that we can get to a point where a compromise based on quality is agreed, and where more homeowners are able to access later life lending without having to take off their entire roof and replace it.
At the moment, we appear to be at something of an impasse but there are too many homes (and owners) impacted by this, for us to allow the current situation to continue.
