After their monthly energy bill doubled to £500 this year, pensioners Rudi Szczerba and his wife Pat wanted to act quickly to insulate their draughty terrace home.
It seemed perfect timing when a salesman cold-called them about a type of loft insulation called spray foam.
With the promise of a 40 per cent reduction in their bills, Rudi, 72, said the decision to have the insulation seemed a ‘no-brainer’.
Savings: Spray foam insulation can be fitted quickly and promises big reductions on energy bills
The foam was installed in September, costing them £3,800. However, if energy bills stay high, they stood to recoup the cost in lower bills in less than five years.
It’s a decision around a quarter of a million households have also made in the past decade. But what few realised is the spray foam comes with a potential sting in the tail.
Because the industry is unregulated, concern is rising among lenders that cowboy firms have not used the correct type of foam or checked whether a property is suitable.
As a result, homeowners are starting to find it difficult to remortgage, unlock equity from their homes — or even sell them.
It’s a scenario Rudi and Pat, 75, have now discovered. The couple, who both worked for Polaroid before retiring, wanted to release £25,000 equity from their newly improved £1 million end-of-terrace home in Knebworth, Hertfordshire.
With no children to pass their property wealth on to, the couple planned to gift the money to a lifelong friend in bad health to help with his finances.
But on hearing about the spray foam, their equity release adviser told them there was no way any equity release lender would lend to them. They say they were not told this by the person who installed the spray foam.
Equity release lifetime mortgages are available to homeowners aged 55-plus and have become popular in recent years.
A record £3.1 billion of property wealth was withdrawn in the first half of the year, according to a trade body.
They let homeowners get a tax-free loan while remaining the owner. The money is paid back if the home is sold, the borrower dies or goes into care. But those using spray foam to insulate their homes are being frozen out of the market.
Not one equity release loan permits spray foam insulation that has been fitted after a property has been built. Only one lender, More2life, will consider it if it was installed during construction and meets strict quality criteria.
Mark Gregory, chief executive of Equity Release Supermarket, says: ‘We think any spray foam installation company should make homeowners aware that if they consider equity release, the foam would currently make them ineligible for a lifetime mortgage.’
Rudi and Pat are just one of 250,000 households who have used spray polyurethane foam to insulate their homes. Before the scheme was withdrawn in March 2021, spray foam was one type of insulation that could be installed using a green homes government grant. It can be used to insulate lofts, roofs, walls and floors to improve energy efficiency.
Mortgage fears: Lenders can have concerns that cowboy firms have not used the correct type of foam
But there is no industry code of practice and installers are not obliged to tell homeowners that it could harm their chances of getting a mortgage or equity release.
Lenders are worried that some installers have not used the right foam or didn’t check if it was right for the home, which could result in rotten beams and an expensive bill to replace the roof covering.
There’s also no easy way for a surveyor, working for a mortgage lender, to see the roof timbers to confirm they are in good condition after being sprayed. This can make a home unmortgagable and unsellable — as Lorna Rolfe found out.
She paid £5,000 to have foam installed in 2020 after seeing an advert on Facebook. But when Lorna, 65, came to sell her home near Dartmoor this summer, her buyer’s bank refused the mortgage after the surveyor spotted the foam insulation in the loft.
To stop the sale falling through, Lorna, an occupational therapist, paid £4,000 to have it removed.
‘I needed to sell my home to move closer to my 90-year-old uncle who has moved into a care home,’ says Lorna.
‘The whole thing caused me a lot of stress and anxiety. I also found out the foam was flammable, toxic and sprayed directly on to electrical cables. My life was at risk the whole time.’
Claims management firm Hydrogard Legal Services says it is pursuing more than 250 claims from vulnerable or elderly homeowners who were targeted by cold-callers and not told the foam could stop 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 turned down, the installer has promised to remove the foam and refund their money.
Kunle Barker, of architect and design studio Barker-Walsh, says: ‘If spray polyurethane foam is not installed correctly, it may not provide the right ventilation, which could cause roof timber to rot.’
Properly installed spray foam allows the roof to breathe, Kunle says, and prevents moisture from building up.
Homeowners are advised 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 evaluation.
And though this paperwork improves a homeowner’s chance of selling the property or getting equity release, it is no guarantee.