After their monthly energy bill doubled to £500 this year, retirees Rudi Szczerba and his wife Pat wanted to act quickly to insulate their drafty terrace at home.
It seemed like perfect timing when a salesperson cold-called them about a type of loft insulation called spray foam.
Promising a 40 per cent reduction in his bills, Rudi, 72, said the decision to have the insulation seemed like a “no-brainer”.
Savings: Spray foam insulation can be installed quickly and promises big reductions in energy bills
The foam was installed in September and cost them £3,800. However, if energy bills stay high, they could recoup the cost in lower bills in less than five years.
It’s a decision that around a quarter of a million households have also made in the last decade. But what few realized is that spray foam comes with a potential sting in the tail.
Because the industry is unregulated, concern is growing among lenders that jean firms have not used the correct type of foam or verified a property’s suitability.
As a result, homeowners are finding it difficult to remortgage, unlock equity in their homes, or even sell them.
It’s a scenario that Rudi and Pat, 75, have now figured out. The couple, who worked for Polaroid before retiring, wanted to free up £25,000 equity in their newly upgraded £1m terrace house in Knebworth, Hertfordshire.
With no children to pass on their estate wealth to, the couple planned to gift the money to a longtime friend who suffered from health problems to help him with his finances.
But upon hearing about the spray foam, their release advisor told them there was no way any release lender would lend to them. They say the person who installed the spray foam didn’t tell them this.
Lifetime principal release mortgages are available to homeowners age 55 and older and have become popular in recent years.
A record £3.1bn of property wealth was withdrawn in the first half of the year, according to a trade body.
They allow homeowners to obtain a tax-free loan while still owning it. The money is returned if the house is sold, if the borrower dies, or if the borrower is taken care of. But those who use spray foam to insulate their homes are being squeezed out of the market.
No equity release loan allows for spray foam insulation that has been installed after a property was built. Only one lender, More2life, will consider it if it was installed during construction and meets strict quality criteria.
Mark Gregory, CEO of Equity Release Supermarket, says: “We believe any spray foam installation company should inform homeowners that if they consider equity release, the foam would currently make them ineligible for a lifetime mortgage.” “.
Rudi and Pat are just one of the 250,000 households that have used polyurethane spray foam to insulate their homes. Before the scheme was withdrawn in March 2021, spray foam was a type of insulation that could be installed with a government green housing grant. It can be used to insulate lofts, ceilings, walls, and floors to improve energy efficiency.
Mortgage fears: Lenders may have concerns that jeans firms have not used the correct type of foam
But there’s no industry code of practice, and installers aren’t required to tell homeowners that it could hurt their chances of getting a mortgage or equity release.
Lenders are concerned that some installers may not have used the proper foam or checked to see if it was the right one for the home, which could result in rotted beams and an expensive bill to replace the roof covering.
There’s also no easy way for a surveyor, who works for a mortgage lender, to look at roof joists to confirm they’re in good condition after they’ve been sprayed. This can make a house unmortgageable and unsellable, as Lorna Rolfe discovered.
He paid £5,000 to have foam installed in 2020 after seeing an ad on Facebook. But when Lorna, 65, came to sell her house near Dartmoor this summer, her buyer’s bank turned down the mortgage after the surveyor discovered foam insulation in the loft.
To prevent the sale from falling through, Lorna, an occupational therapist, paid £4,000 to have it removed.
“I needed to sell my house to get closer to my 90-year-old uncle who moved into a nursing home,” says Lorna.
“All this caused me a lot of stress and anxiety. I also found that the foam was flammable, toxic, and was sprayed directly onto electrical wires. My life was in danger the whole time.
Claims management firm Hydrogard Legal Services says it is processing more than 250 claims from vulnerable or elderly homeowners who were targeted by cold calls and not told the foam could prevent them from selling their home.
Rudi and Pat are in talks with a lender who has agreed to look at the guarantees their installer provided. If they are refused, the installer has promised to remove the foam and refund your money.
Kunle Barker of architecture and design firm Barker-Walsh says: “If polyurethane spray foam is not installed correctly, it may not provide adequate ventilation, which could cause the ceiling wood to rot.”
Properly installed spray foam allows the roof to breathe, Kunle says, and prevents moisture from building up.
Homeowners are encouraged to work only with an installer who completes a report on the condition of the roof, the felt underneath, and the risk of condensation, known as a hydrothermal assessment.
And while this paperwork improves a homeowner’s chances of selling the property or getting an equity release, it’s not a guarantee.
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