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Thousands of households REFUSED mortgages after installing popular energy-saving method
Read on for expert tips on who to contact for help
THOUSANDS of homeowners are still being refused mortgages after they installed spray foam insulation in their roofs.
It is estimated that as many as 300,000 UK homes have this insulation, which has been used for decades as a way to cut energy bills.
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But spray foam can cause structural damage if it is not installed correctly.
Much of this spray foam was installed using funding from the previous Government’s Green Homes Grant scheme.
Through the scheme, individual homeowners could apply for funding worth up to £5,000 to cover two-thirds of the cost of installing energy-efficiency measures.
The money could be used for a variety of home improvement projects including installing heat pumps, energy-efficient windows, doors and spray foam insulation.
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In a Parliamentary debate in December MP Tom Gordon revealed that between September 2020 and March 2021, just short of 50,000 vouchers were paid to homeowners.
The exact number of vouchers which were spent on installing spray foam is unknown.
But almost 14,000 vouchers were used for loft and pitched roof installation, which could have included spray foam.
Installing spray foam usually involves spraying a liquid foam onto the inside of the roof, which then sets to form a hard layer of insulation.
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But it can trap condensation and create damp, which can cause the roof timbers to rot.
Despite installing the foam as a way to reduce their energy bills, these homeowners are now facing thousands of pounds of remedial work.
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Meanwhile, their homes have become unmortgageable and difficult to sell.
There is currently no compensation for those affected.
The Sun asked five of the nation’s largest mortgage lenders whether they would lend to a homeowner whose property has spray foam.
The majority of lenders said that they would only lend to homes with spray foam if a valuer’s report is completed.
What was the Green Home Grant scheme?
The Green Homes Grant voucher scheme provided homeowners and landlords with grants to make energy-efficient improvements to their homes.
The voucher covered up to two-thirds of the cost of their chosen improvements, up to a maximum government contribution of £5,000.
If the homeowner or someone in their household received certain benefits then the voucher could cover up to 100% of their chosen home improvements.
The maximum overall government contribution was £10,000.
You would have been eligible for the scheme if:
- You owned your own home (including long-leaseholders and shared ownership)
- You owned your own park home on a residential site
- You were a residential landlord in the private or social rented sector (including local authorities and housing associations)
The voucher could be spent on 'primary' or 'secondary' measures.
The money must have been used to install at least one primary measure, such as:
- Insulation: solid wall, cavity wall, under-floor, loft, flat roof, pitched roof, room in roof or insulating a park home.
- Low carbon heat: air source heat pump, ground source heat pump, solar thermal, biomass boiler, hybrid heat pump.
If you installed at least one primary measure then the voucher could be used to help cover the cost of any of the following secondary measures.
These included:
- Draught proofing
- Hot water tank insulation
- Double or triple glazing (when replacing single glazing)
- Secondary glazing (in addition to single glazing)
- External energy efficient replacement doors (replacing single glazed doors, or doors installed before 2002)
- Hot water tank thermostat
- Hot water tank insulation
- Heating controls (such as appliance thermostats, smart heating controls, zone controls, intelligent delay start thermostats, thermostatic radiator valves)
The amount you got towards the cost of secondary measures could not exceed the amount you got for primary measures.
This costs around £312, based on the average UK house price of £285,000, according to Compare My Move.
Santander said it will lend to homes with spray foam on a case-by-case basis.
A surveyor may need further information, such as a Structural Engineer’s report, to fully assess the property during the mortgage application process.
Homeowners who have a Santander mortgage can transfer to another deal with the lender without additional checks on their insulation as long as they do not make any changes to their mortgage, including increasing the amount they borrow.
Virgin Money said it will consider applications on a property with spray foam on an individual basis.
It said it would take into account a valuer’s report and the sustainability of the material used and their installation.
NatWest told The Sun it relies on the opinion of its independent valuers to assess the suitability of a property for a mortgage.
Nationwide said it would lend on properties with spray foam but it requires evidence it has been installed correctly first.
HSBC said it will not lend to listed buildings which have spray foam.
It may grant mortgages to other properties if a suitable specialist report and warranty is provided.
The news comes after we revealed that estate agents, brokers and surveyors said they have seen an increase in the number of mortgage applications being rejected because of the presence of spray foam.
Meanwhile, some homeowners have been unable to sell their properties because of spray foam.
Mr Gordon shared the story of his constituent Tom, whose home sale fell through after surveyors discovered spray foam.
The person buying his home said he would not be able to get a mortgage approved on the property because of the insulation.
Tom was forced to spend £4,000 to have the insulation removed.
Tom said he would not have considered installing spray foam insulation without the Green Homes Grant scheme.
Through the scheme he applied for a voucher that would cover two thirds of the cost of the upgrades and put in £1,000 of his own money.
He chose an installer from a Government-approved list and believed they met the standards to complete the work.
Meanwhile, another of Mr Gordon’s constituents, called Norma, said she will need to have all of her roof timbers replaced due to the severity of damage caused by spray foam.
What should I do if my home has spray foam?
If you are worried about the presence of spray foam in your home then you should contact an independent and impartial professional.
Confirm that they are independent and are not attached to a spray foam installer or remover.
Check that they have suitable building pathology expertise, which includes inspecting, investigating, diagnosing and reporting defects within buildings.
Make sure they have expertise and experience in spray foam insulation and retrofit insulation.
You should also check that they are up to date with the latest industry guidance.
Spray foam has led to an increase in unregulated foam removal companies.
These firms prey on vulnerable households and charge hugely inflated prices to remove the insulation and can cause further damage to your property.
Never accept a cold-call offer to install or remove the spray foam.
Look for a company that has no commercial interest in the outcome of your inspection, such as a RICS chartered building surveyor with experience in building pathology.
Visit ricsfirms.com for more information.
Where can I find financial help?
There are several grants and cash payments you could get if you are struggling.
Household Support Fund
If you are struggling to pay your bills then you may be able to apply for support via the Household Support Fund (HSF).
The funding is designed to help people who are vulnerable or cannot afford necessities including energy bills, water bills and food.
The help may be paid as cash, food or fuel vouchers.
What support is available and whether you are eligible varies by council.
Check your local authority's website to see what is on offer and how to apply.
For example, St Helens Borough Council in Merseyside is offering support with essential bills.
Low-income families can apply for support with their food, fuel bills and other living expenses such as utility debts.
They can also get cash to help with the cost of purchasing furniture or white goods.
Households can apply for payments worth £200.
Those over 80 who are not eligible for this year's Winter Fuel Payment can get £300.
They must be receiving Housing Benefit or another Council Tax reduction.
Warm Home Discount
The Warm Home Discount Scheme is a one-off £150 discount on your energy bill.
If you are eligible then your energy supplier will usually apply the discount to your bill.
You may instead be sent a voucher if you have a prepayment meter.
Applications for the scheme opened in October but there can be a delay before the payments are made.
To qualify for the cash you usually need to be claiming one of a range of means-tested benefits during the qualifying week, which is typically in August.
But if you successfully claim for backdated benefits then you may still be able to qualify after this date once your benefits are confirmed.
If you qualify for the Warm Home Discount then you should receive a letter to tell you.
These letters are usually sent between October and January.
You can use our guide to check which benefits qualify for the help.
Plus we explain how to get the cash if you think you are eligible but have not received a letter.
Free electricity and gadgets
Several energy suppliers are giving customers free gadgets to help them cut their energy bills.
Octopus Energy is handing out freebies including electric blankets to customers as part of its Octo Assist fund.
The bankets can save customers up to £150 across winter.
Octopus customers can also borrow a thermal imaging camera to help find spots in their homes where heat is escaping.
Once they have identified the draughts, customers can look into ways toget them fixed, which can help to reduce their energy usage.
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Meanwhile, EDF customers can get their hands on free energy-saving gadgets such as air fryers, kettles and slow cookers.
EDF has also said it will replace broken or poorly-working appliances with energy-efficient ones.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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