Spray foam blighting sales as mortgage firms reject applications
Five major banks and building societies have told the BBC they will turn down loans for homes with spray foam insulation.
Spray foam insulation, particularly polyurethane foam, is increasingly impacting the property market, with several major lenders refusing to issue mortgages on homes where it is present. As estate agents, we want to ensure our clients are fully informed about the potential challenges associated with this material.
Lenders’ Stance
A recent BBC investigation highlighted that major lenders such as TSB Bank, Skipton Building Society, Co-operative Bank, Principality, and Aviva are refusing mortgage applications for properties with spray foam insulation. Additionally, Yorkshire Building Society and Metro Bank will not lend if a significant amount of foam is detected in the property.
Some lenders, including Lloyds, Nationwide, Barclays, NatWest Group, and Santander, do consider applications on a case-by-case basis, often requiring a detailed valuer’s report. However, surveyors frequently recommend the removal of spray foam insulation before proceeding with a sale, adding time and expense to the process.
Key Issues
• Structural Risks: Poorly installed spray foam can cause damp problems and compromise roof structures, making properties less appealing to lenders and buyers alike.
• Unregulated Installers: Rogue installers have been targeting homeowners, offering substandard work that results in long-term issues.
• Resale Challenges: Homes with spray foam insulation may face delays in selling or reductions in value due to restricted mortgage availability.
Market Impact
Nationwide previously estimated that spray foam insulation has rendered approximately 250,000 homes ineligible for mortgages, as lenders grow increasingly cautious. While spray foam can improve energy efficiency when properly installed, its risks are making it a contentious issue in the housing market.
Advice for Sellers
If your property has spray foam insulation, we recommend consulting a professional surveyor and obtaining all relevant installation documentation. This can help address potential concerns and ensure a smoother sales process. If issues arise, specialist firms are available to assist in removing or rectifying the foam.
Our priority is to guide you through the selling process and ensure your property is as marketable as possible. If you have any questions about spray foam insulation or other aspects of your home, please don’t hesitate to reach out.