Will spray foam insulation in our residence’s loft delay potential patrons?

We live in a small detached house. When we bought it many years ago, we had spray foam loft insulation installed. 

We were told at the time that it came with a guarantee, that ventilation was not obstructed and there was no risk. 

But now, we understand that it can cause problems with the roof and that some mortgage lenders won’t provide a loan to homes with this type of insulation. 

We are considering selling the house. Should we think about removing it?

How much would it cost and are there any risks involved?

If we don’t get it removed, would this affect the price our home could fetch?

Ed Magnus of This is Money replies: You won’t be the only one grappling with this problem at the moment.

There are estimated to be around 250,000 homes that have had spray foam insulation installed – much of this taking place under the previous government’s Green Homes Grant scheme. 

Before the scheme was withdrawn in March 2021, spray foam was one type of insulation that could be installed using a grant from the scheme. It can be used to insulate lofts, roofs, walls and floors to improve energy efficiency. 

But now, as many as a quarter of Britain’s biggest mortgage providers will refuse an application if spray foam is present in the roof, according to a recent BBC report.

This would be enough to worry homeowners – but it could also put buyers off and impact the market value as well.

Every lender will require a valuation before they lend, but this will vary from an in- person valuation to an online assessment, known as an automated valuation model (AVM). If it is the latter, you might get away with it on the mortgage side of things.

However, a buyer will probably schedule an independent survey, and spray foam is much more likely to be picked up here.

The surveyor will advise a buyer on the potential risks, and that could be enough to put them off completely or result in a lower offer, accounting for the cost of removing the insulation themselves.

For expert advice in answering your questions, we spoke to James Perris, managing director at De Villiers surveyors, Paul Dunne, partner in building consultancy at Rapleys and Chris Sykes, technical director at mortgage broker, Private Finance.

Why is spray foam insulation a problem?

James Perris replies: Unfortunately, whilst this insulation was in part encouraged by the previous government, it is now rejected completely by many lenders, whilst other lenders will consider it on a case by case basis.

As surveyors we have been generally critical of this type of foam for over 20 years mainly due to it causing roof leaks to go unnoticed and causing decay to the roof timbers, as well as a general lack of ventilation in the roof. Its removal will also increase the costs of re-covering the roof. 

In more recent years its environmental credentials have also been called into question, although not many manufactured insulation materials are chemical-free.

If the foam insulation is placed between, as opposed to over, the rafters this reduces the concern slightly, as leaks can become apparent and the roof timbers can still breathe. 

However, where the roof gets a total coating, timbers and all, this becomes more of an issue.

I fully understand the frustration of homeowners as it is really unfair that such products can be sold as a positive, and then negatively affect the value of your home. 

Should you remove spray foam insulation?

Paul Dunne replies: Until the type of spray foam that has been used has been identified, and you have established whether it was used correctly, it’s difficult to say.

The best thing to do is to take a closer look with an experienced surveyor. They can determine where exactly the spray foam is – for example in the walls only or, worse case scenario, bonded to the roof – and if possible the type of foam that was used.

Removing the foam can be very costly, depending on where it is and what type was used. 

If it is just in the walls of your loft then that’s more simple. If it’s in the roof and it’s directly bonded to it, you may have to remove the roof and tiling and in more extreme cases, replace them. 

You mention a ‘guarantee’: how long was this guarantee supposed to last, and is the company you bought the house or spray foam installation from still operational? 

It may be worth looking at the paperwork. The last several years have seen a rise in ‘cowboy’ builders using the wrong type of spray foam insulation on the back of the well-intentioned but poorly practiced Green Home Grants, so how the installation was purchased and completed is important. 

For example, if it was done as part of the house build and you have a new home certificate this may cover it.

How much does it cost to remove?

James Perris replies: In my opinion, and unlike other potential mortgage issues such as structural movement or knotweed, the removal of the foam has a definitive cost.

Whilst it depends on the size of your roof and the thickness with which the spray was applied, one homeowner reportedly spent £4,331 to remove the insulation. 

So perhaps one solution would be to get the estimates now to show any prospective buyer and their mortgage lender what the worst-case scenario will cost.

Will spray foam make a home unmortgageable?

Chris Sykes replies: Spray foam insulation is a really tricky subject. When it comes to mortgages it is a key factor to consider.

When valuing a property, lenders can do it digitally sometimes, so the subject of spray foam may not even come up. 

But in other cases, a lender will send a physical valuer round to the property. If that valuer accesses the loft and finds spray foam, it can cause a property to be declined then and there.

It depends on the lender and the type of spray foam. For example, if you take Accord mortgages (part of Yorkshire Building Society) or the Skipton Building Society then they will be an automatic decline for the property, and that cannot be overturned unless the foam is removed and the timbers are deemed fine.

But other lenders can be more flexible, such as Nationwide and Santander.

Spray foam will need to be inspected by the valuers and appropriate documentation provided to evidence it is the new generation of spray foam, rather than ‘closed cell’ spray foam that can cause significant damage to a roof and timbers. 

If there is documentation, certification, and warranties with the spray foam you have then there are several lenders that would consider lending. 

It is possible a timber or structural report would be required for a lender and the valuer to make this decision, though.

Paul Dunne adds: Some lenders may be reluctant to offer a mortgage as it stands because they don’t know what type of foam it is. 

Lenders struggle to assess spray foam leading to delayed mortgage offers or refusals. 

Even if there is a British Board of Agrément Product Certificate – a document proving construction materials are fit for purpose – many lenders will ask for a 10 year insurance-backed guarantee. 

If an insurance-backed guarantee cannot be provided there is substantial risk it will impact the value of a property and a property may be rendered un-mortgageable.

Will it impact the property value? 

Chris Sykes replies: This is no doubt a major concern – whether to leave it or remove it and what affects it will have on value.

Really you need to approach some local estate agents and get their views on it, any limitation to purchase like not being able to mortgage with certain lenders can cause properties to be worth slightly less, where some buyers would see having additional insulation as a huge positive to the property and value it, so there are a lot of considerations to take.

Paul Dunne adds: Given the reputation and media coverage of this type of insulation, buyers may be put off and a valuation is, after all, only accurate if someone will pay that price. Spray foam is normally a red flag when undertaking a survey.

Any final words of advice?

Paul Dunne replies: The best advice is to hire a professional surveyor to come and take a look. 

They can tell you what type of spray foam was used, if it was used correctly and whether it needs replacing and how much it will cost.

Remember – not all spray foam insulation is unfit for purpose, not all of it was fitted incorrectly and not all banks are avoiding spray foam for mortgages, rendering housing unsellable. 

But it can be a real problem, and it does need sorting so find out what you need to know first and foremost.