Spray Foam Mortgage Problems – The Other Side Of the Story

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Spray Foam Mortgage Problems – The Background

In this article we look at “spray foam mortgage problems” that exist in the UK currently. ThermoFoam is a UK distributor of spray foam insulation systems which are manufactured by Enverge, a US-based company owned by global giants, Holcim. Our spray foam systems include Sucraseal Open Cell and Nexseal LE Closed Cell. Both systems have been tested to European standards and hold BBA Certification for the suitability in pitched roof, wall and floor scenarios. We do not speak for any of the organisations mentioned in this article and unless information has been obtained from a verified source, all comments or quotes are the express opinions of ThermoFoam’s only.

In the residential market, spray foam insulation has come under intense scrutiny over the last few years as certain sectors hold concerns about it’s suitability at pitched roof level in older UK homes. This has led to some homeowners struggling to sell their homes with spray foam in-situ due to some mortgage lenders taking a risk averse approach. 

What Is The Spray Foam Mortgage Problem?

Fundamentally, there is no problem with spray foam insulation as a material. It is made from Polyurethane which is a common material used extensively in the modern world. If you’ve ever come across sheets of PIR Insulation board, spray foam insulation is the same material. The only difference is the manufacturing process where PIR board comes in pre-formed sheets whereas spray foam insulation is manufactured in situ by the installer.

The stigma that spray foam insulation is a bad product has been misconstrued. The product is never the issue, it’s whether or not it has been used in the correct circumstances and installed in accordance with manufacturers guidelines, industry standards and the product Agrement Certification (BBA or KIWA). The fact is, there are spray foam installations in the UK that have not met the required standards which is why there are some spray foam mortgage problems. There are also many residential installations that do meet the required standards and the spray foam is providing a viable, durable and effective insulation solution, often for the life of the property.

Essentially, some organisations and individuals within the building surveying, property care and mortgage lending sectors fear that spray foam insulation reduces the natural ventilation within the roof space and that this could lead to increased moisture within the attic and structural timber decay of the roof rafters. These concerns were highlighted by the Property Care Association (PCA) in their Joint Position Statement which was released in 2021. We’ll explore the Joint Position Statement in more detail later in this article.

Residential Pitched Roof Insulation Scenarios

There are three main scenarios where spray foam insulation has been used in pitched roof applications and each has a different outcome based on the risk profile. It’s important to understand where spray foam insulation is suitable for use and the scenarios below demonstrate the situations where it may or may not cause a problem. Some of these application types may contribute towards the spray foam mortgage problems which is why it’s imperative that homeowners are clear on what type of foam application they have.

Closed Cell Foam Direct To Roof Tile

This was a primary use for the closed cell variant of spray foam insulation when it was first introduced into the UK around 30 years ago. Closed cell is a high-density and thermally efficient material that is also classed as a vapour barrier in some climate zones. Some older homes may not have been constructed using a roof membrane under the roof tiles to protect the interior attic space from the impact of driving rain and moisture. In these scenarios, as the roof ages and tiles begin to slip or crack, closed cell spray foam was seen as a great option when applied directly to the underside of the tiles to stabilise, bond and strengthen the roof. This system can provide several decades of additional lifespan and it often prevented homeowners from the more costly investment of stripping and renewing the roof tiles and membrane.

The problem with closed cell foam bonded directly to tile is the risk of moisture seeping in through the tiles and becoming trapped within the foam. This can lead to the decay of roofing battens and rafters on the outer layer of the insulation. Over a period of time, the decay may accelerate and damage the structural integrity of the roof space. Although roof stabilisation was a certified system through some spray foam manufacturers, it is not supported as a viable solution for current and future installations. We understand that there are no circumstances where a mortgage lender will support the use of spray foam insulation directly to roof tile and it’s likely that the homeowner will need to pay to have the spray foam removed. This type of application is deemed high-risk and is a major cause of spray foam mortgage problems.

Open Or Closed Cell Foam Direct To High Resistance Roof Felts

Likely to be the most common installation found in UK homes, both closed cell and open cell foams have been used in circumstances where there is a pitched roof with a high-resistance, bitumen felt-style roofing membrane located under the tiles. Open cell foam started to gather momentum from 2012 onwards and is probably the most common variant of foam found in UK homes. It is a low density, breathable and vapour open material which means moisture can pass through it with relative ease.

High resistance roof membranes are excellent at protecting interior building fabrics from the impact of driving rain and moisture but they lack breathability and that means internal moisture, known as interstitial condensation, cannot pass through them. These type of membranes are common in UK homes built before the 2000’s but are now been replaced with lightweight, breathable membranes in new builds and re-roofing of existing homes. The concern with spray foam, applied directly to high resistance membranes is particularly pertinent to open cell foam which will allow moisture to pass through it before it reaches the barrier of the membrane and then cannot escape from the property.

This can manifest in winter months when warmer internal air passes through the insulation to meet the colder exterior surface of the roof. Condensation can accumulate in the outer 1cm layer of the insulation and sit there for several months which, over time, may cause the decay of structural roof timbers. Depending on the property circumstances, occupation, size and ventilation strategy within the home, any moisture may build up, accumulate and worsen year after year, accelerating decay. The chances are, during warmer summer months, any moisture held within the insulation will dry out and evaporate but nonetheless, it could accelerate decay and that’s where mortgage lenders and building surveyors see risk.

When closed cell foam is used directly to high resistance felts in southern climate zones of the UK, there is thought to be a less than 1% risk of timber rot. Conversely, when used in northern climate zones, the risk increases. Based on a recent Government HSE study, all open cell applications directly to high-resistance felts present a heightened risk to the property in all climate zones of the UK. The application of spray foam directly to high-resistance felts is a contributory factor to spray foam mortgage problems but it can almost always be solved without the need for expensive removals.

Open Or Closed Cell Foam Direct To Low Resistance Roof Membranes

It doesn’t matter whether open cell or closed cell foam is applied directly to low-resistance, breathable roofing felts, the risk of structural decay is extremely low. For the various brands of spray foam, just about all BBA and KIWA certificates support the use of the material when applied directly to low-resistance roof membranes. It is always prudent to assess the condensation risks using hygrothermal software but the likely outcome is that the risk is low and that the spray foam will not damage or degrade structural roof timber.

Just about all new build homes are constructed using low-resistance, vapour open materials and this means that should any internal moisture be present within the property, it should be able to pass through the building envelope with relative ease and will not sit within the structure for extensive periods of time. Spray foam insulation is a viable proposition in these scenarios and thanks to its airtight thermal performance, it can be used to meet onerous U-Value targets and could be the perfect insulation material for Passivhaus standards.

It’s important to note that modern buildings need to comply with Part F of the Building Regulations for Ventilation. This means that much of the internal moisture sources within the home are handled at source before they even reach the building fabric. Similar modern and mechanical ventilation strategies can of course be implemented into existing homes to reduce the risk of interstitial condensation but some within the property sector are unwilling to accept the concept that older homes can be updated to modern standards, sealed tightly and then ventilated sufficiently through mechanical means without the need to retain inefficient, natural ventilation openings. Vapour control layers are also integral at managing and preventing moisture from reaching the structural building assembly when used in new and existing homes. This type of application is low-risk and should not contribute at all towards spray foam mortgage problems.

The Joint Position Statement & Inspection Protocol For Spray Foam Mortgage Problems

The Joint Position Statement was released by the Property Care Association (PCA) in autumn 2021. Its intentions were to raise questions and awareness for its members (building surveyors and property care specialists) who encountered spray foam insulation in UK homes and weren’t sure on its use, performance and suitability for the property. Although the intention of the Joint Position Statement was to open up discussion around the spray foam product, it could be seen as a precursor that led to several mortgage institutions to pause lending on homes where spray foam was present. This created turmoil and confusion for homeowners, ambiguity for building surveyors and led to many company closures and insolvencies within the spray foam industry based on the demand for the product waning. The concerns raised have also contributed towards the current spray foam mortgage problems.

Fundamentally, whilst the release of the Joint Position Statement has undoubtedly damaged the spray foam industry and caused turmoil for homeowners looking to sell their homes, there was validity in some of the concerns raised and it was mainly released to help its own members better understand those concerns. The problem has been the blanket approach to spray foam insulation where many building surveyors, appointed on behalf of mortgage lenders, were risk averse to commenting on the roof condition, especially where the spray foam installer failed to provide the homeowner with handover paperwork, warranties, product certification or condensation risk analysis.

The continued ambiguity led to the formation of a proactive working group where many stakeholders from different industries came together to better understand the suitability of spray foam. The group designed an Inspection Protocol framework that would enable Building Surveyors and mortgage lenders to assess risk profiles with more confidence. The working group comprised of:

  • RICS (Royal Institute of Chartered Surveyors.
  • Spray Foam Manufacturers including ThermoFoam, Synthesia, Huntsman, BASF, Logicfoam and Isothane.
  • Property Care Association (PCA)
  • Building Surveyors and Building Scientists
  • Nationwide (Mortgage Lender)

Across several working group meetings, the stakeholders worked together to devise an Inspection Protocol that was aimed to help solve the spray foam mortgage problems and it was broadly agreed by all and subsequently released in March 2023. It was hoped that this would create more confidence for mortgage lenders so that they could lend on homes with spray foam in-situ. Also clearer guidelines for Building Surveyors so that they could assess risks on a case-by-case basis and arrive at a fair conclusion based on the information available.

The Current Situation With Spray Foam Mortgage Problems

Following the implementation of the Inspection Protocol, several mortgage lenders will consider lending on homes with spray foam insulation. A recent Sunday Times article listed the follow lenders and their stance as follows:

HSBC – spray foam to roof spaces is unacceptable for any Listed Buildings. For other properties it may be acceptable if a suitable specialist report (in accordance with PCA protocols) and warranty is provided.

Barclays – Loans are evaluated on a case-by-case basis. Where the valuer (building surveyor) has concerns about the standard of the installation and possible adverse impacts, a detailed structural survey is commissioned.

Lloyds – We treat each case based on valuer’s (building surveyor) report. The majority of cases where foam insulation has been present it has not prevented us from lending.

Santander – Presence of spray foam does not prevent a mortgage application. Assessed on a case-by-case basis. A surveyor may need further information, such as a Structural Engineer’s report.

Natwest – Will consider lending. Subject to the professional opinion of the valuer (building surveyor), who may require specialist reports to confirm there have been no adverse impacts as a result of the insulation.

On the face of it, homeowners can obtain a mortgage when they choose to buy a property with spray foam insulation but they are often guided by the valuer (building surveyor). There remains reluctance from some surveyors to accept the presence of spray foam insulation despite the Inspection Protocol. Naturally, where they cannot see the condition of the roof itself or don’t have access to a Homeowner Pack, their Professional Indemnity Insurance can be impacted depending on how they arrive at a fair conclusion should their advice end up being incorrect. Additionally, it has also taken time for the Inspection Protocol to be adopted, understood and implemented by building surveyors and they may still act cautiously when they come across spray foam insulation. 

Whilst the opinion of a professional building surveyor should be respected, it doesn’t mean that a risk averse approach or negative conclusion is correct and there have been many instances where the spray foam install has eventually been deemed compliant and a mortgage has been granted. Often, the mortgage lender will still offer finance even if the building surveyor cannot confirm the installation is compliant but a further, more invasive survey may be required. In many cases, the simple provision of more detailed paperwork and product certification backed by a condensation risk analysis can completely solve the issue and stop spray foam mortgage problems.

Spray Foam Removals Related To Spray Foam Mortgage Problems

There’s no doubt that in certain situations, spray foam insulation may require removal from the pitched roof. This will be particularly pertinent where closed cell foam has been applied as a stabilisation system directly to roof tiles. There will also be some circumstances where poor workmanship or incorrect product design leads to roof structure damage and it requires removal. In a large number of cases, even non-compliant spray foam insulation can be made suitable with some simple remedial actions such as the implementation of a vapour control layer, something that might become a common addition where spray foam has been applied directly to high-resistance roof membranes.

Unfortunately, due to the negative stigma surrounding spray foam insulation, there has been a rapid rise in “spray foam removal” companies appearing on social media and online. Many of these companies were involved in the installation of spray foam historically and have either sold consumer data or have set up as a removal company, therefore making money on the installation as well as the removal. To be clear, spray foam removal should always be the very last resort and in most circumstances, there will be inexpensive methods that can make the spray foam compliant and ensure its left in-situ.

Steve Hodgson, ex-PCA Chairman acknowledges the problem of spray foam removal in his recent article “We Created A Monster“. Steve’s concluding advice is:

  • Don’t pay thousands of pounds for spray foam installations that fail to meet the exact requirements of the supplier’s product approval certificates. Don’t take anyone’s word for it, do your homework and check before they spray.
  • Don’t pay contractors who call or message out of the blue or that suggest fancy or expensive solutions to remove foam. Damage caused by foam happens slowly and the risks are greater during the winter. You have time, so please don’t rush to make bad or expensive choices.
  • Do ensure that the handover packs relating to PU foam installations are comprehensive and complete and that any guarantees offered cover all risks, not just an assurance that the foam won’t come apart or fall off.
  • Do consider insulation at ceiling level as your first option using mineral fibre quilt. It is almost always the cheapest, adaptable and energy efficient solution.
  • Do speak to the right people, gather information, make informed choices. And please don’t throw good money after bad. A zero valuation for mortgage purposes doesn’t mean a home has no value or is worthless, it just means the lender doesn’t want to lend right now, but this can almost always be fixed!

It’s important to comment that many of the spray foam removal companies are unscrupulous in their approach. They will often cold call and scaremonger homeowners that they must get the spray foam removed because it will cause damage. They will incorrectly state that homeowners cannot sell their homes if they have spray foam in-situ and they simply play upon the spray foam mortgage problems to line their pockets for a solution that is quite often not needed. DON’T panic if you’ve got spray foam insulation and you’ve been approached by a removal company or you’ve read a negative article. The media have a tendency to publish negative, sensationalist press articles but we’ve not seen much evidence of a balanced argument on the pros and cons of spray foam and where it is and isn’t suitable. In addition, there are thousands of success cases where homeowners have very successfully sold their homes with little issue. These success stories never get published in the mainstream media. 

What Is The Spray Foam Industry Doing About Spray Foam Mortgage Problems?

If some news reports are to be believed, our industry is doing nothing to reassure homeowners, nothing to work with surveyors and lenders and nothing to regulate or improve the industry to banish the spray foam mortgage problems to the past. This couldn’t be further from the truth. The main manufacturers of spray foam insulation work together with support from the Insulation Manufacturers Association (IMA) and have put together a Best Practice Guide for the correct implementation of spray foam insulation in domestic pitched roofs. The group also work together, meeting frequently to discuss the industry, commission studies and analyse evidence which has led to updated Best Practices in certain situations. Some might say that some factions of the media or property professionals sector want the negative focus on spray foam to continue until the industry is damaged beyond repair. That’s a short-term, negative approach that doesn’t factor in the wider picture about just how suitable the product is in new-build homes, passivhaus homes and the commercial, industrial and agricultural sectors.

Instead of applying spray foam insulation directly to high-resistance, bitumen felt-style roof membranes, the spray foam industry now insists upon an isolation card which creates a 40mm ventilated air gap between the spray foam and the roof membrane to meet compliance with BS 5250. In recent meetings, this protocol was introduced following the Governments HSE report which determined a medium to high risk for direct to high-resistance membrane applications. Spray Foam manufacturers carry out surveillance on their approved installers and have robust criteria for issuing product warranties, of which the installer must demonstrate that they have adopted the correct design and have installed the product compliantly.

When it comes to homeowners who may have concerns over the saleability of their property as a result of the spray foam mortgage problems, every manufacturer actively supports the process by assessing installations, demonstrating compliance, offering remedial solutions and providing evidence and paperwork to support the installation. The spray foam industry is open for business and is committed to communicating with homeowners, building surveyors, mortgage lenders and any other industry stakeholders to alleviate the spray foam mortgage problems. We, as an industry, don’t get approached enough by the media when they publish negative articles and when building surveyors (and others) post online about their negative experiences with spray foam. Rarely, if ever, do they post positive encounters where the product was right for the property and installed compliantly which led to a homeowner obtaining a mortgage without difficulty.

Of course, we cannot speak for our counterparts in the industry but from our perspective, some of the concerns raised in the Joint Position Statement were applicable, they were right to be raised and the industry did require better regulation. We’re prepared to say that some installations simply aren’t up to the required standards and that building surveyors have a right to approach an installation with a degree of caution. But that doesn’t make the product bad or not suitable in domestic pitched roofs, particularly new builds. By driving up standards and ridding the industry of the bad installers, there is a much higher calibre of spray foam installer available in the UK marketplace and the future of spray foam could be bright if people are prepared to work with the industry, let us have a voice and approach every situation on a case-by-case basis with an open mind.

Closing Summary Related To Spray Foam Mortgage Problems

For those who post negative experiences or damaging articles online, that’s your right and your prerogative, provided it is accurate. After all, highlighting non compliance and calling out bad installs can often help to drive the need for future compliance but it’s got to the stage where we feel that so much negative press has been published that it’s now counterproductive to actually sorting out the problem of spray foam once and for all. As it stands, the Government have no plans to ban its use and several mortgage lenders will lend where spray foam is present. So let’s ensure we keep the spray foam industry in tact and be more open-minded to working together to drive up standards and find resolutions. Every future story or article about spray foam should be approached in the same manner as this article – fair and balanced, considering both sides of the argument.

Our industry has been referred to as a network of “global and wealthy multinationals hiding behind a web of unscrupulous cowboy installers doing a shoddy job with an unsuitable product”. But behind that perception is a diligent and controlled manufacturing process that uses extremely expensive machinery to create an airtight thermal insulation product that is fit for purpose in the modern world of airtightness, U-Values, net zero targets and energy conservation. The UK is falling to the very back of the line in the race to net zero having once led the way 15 years ago. It is a damning indictment of our insular thinking and demonstrative of our place on the global stage as a nation in chaos, without leadership, without direction and without the fight to once again lead the way.

In America, spray foam accounts for 17% of the entire insulation market. In the rest of Europe, it is predicted to follow a similar trajectory. Our Irish neighbours just across the sea have a Government grant that supports spray foam and that’s after they went through similar regulation of the industry. The UK is unique in its distain for an insulation material that can truly help to conserve energy and provide long-term performance for homeowners and businesses alike and as a nation, we are suggesting the rest of the world is wrong. Whilst the stigma and momentum continues to fight against the viability of spray foam insulation, soon it’ll be gone from this country forever and we can remain at the back of the league tables when it comes to sustainability and net zero targets. All we’ll be left with is continuing spray foam mortgage problems with no one from the industry around to help homeowners. Britain was once Great, now it’s just Britain and it’ll continue to be that way until we are open to new technologies and more willing to work together rather than against each other.

Our industry hasn’t always been right and we haven’t always followed regulations and standards but with any new or emerging technology, often it takes time (and mistakes) before it can be fixed. Take any product or service for example, it doesn’t matter how well its manufactured, if installed badly, there will be problems, from solar panels to double-glazing to flat roofing. Bad installations needed to be highlighted so that we can improve future standards and as an industry, we’re doing just that but we can’t get the traction we need whilst we don’t have a voice. We’re definitely partly to blame for the spray foam mortgage problems by virtue of the fact that not every installation is compliant or suitable. In recent mainstream media news articles, the authors haven’t even bothered to contact the Insulation Manufacturers Association (IMA) for a balanced comment, a further example that for now, the other side is not always prepared to listen despite the progress the spray foam industry is making.

 

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