Miatta Fahnbulleh, the minister for energy consumers, met with mortgage lenders and the manufacturers, distributors and installers of spray foam earlier this quarter to discuss the issues homeowners face when trying to sell up or raise finance.
The roundtable was a fact finding exercise by the government, Mortgage Solutions understands.
The aim of the roundtable was to inform the government of the scale of the issue, to establish which lenders will and will not lend on homes with spray foam and to gather any other available intelligence.
Some mortgage lenders refuse to lend on homes with spray foam installed, which can result in homeowners facing bills of thousands of pounds to have the foam removed. In the equity release market, there is a blanket ban on lending on such homes.
Around 250,000 homes are believed to have spray foam, according to figures from the Insulation Manufacturers Association.
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A survey by the Property Care Association found that 35% of homes fitted with spray foam insulation had one or more issues. In 27% of cases, the insulation needed to be removed or the roof replaced.
Spray foam sector asked for evidence
Mortgage Solutions also understands that several major mortgage lenders attended the roundtable and shared their lending policies. The government’s interest in the issue is understood to have been seen as positive.
The spray foam industry has been asked to prepare a case to address lender concerns, which will include evidencing through individual audit regimes that work has been done to standard, it is understood. It has also been asked to gather information from other countries to demonstrate how spray foam is safe when correctly installed.
A follow-up roundtable discussion with the industry is expected, but no date has yet been set.
It is understood that the government aims to set out plans for comprehensive reform as part of the Warm Homes Plan by October.
A UK Finance spokesperson said: “Spray foam can cause issues in properties, and it is something that mortgage lenders will consider, as there is often a lack of certification around its use and installation.
“We have been engaging with the government on this whole issue, including the issue of ensuring customers get the right advice and support. We look forward to hearing what the government’s plans are in their Warm Homes Plan.”
