Poor Insulation Could Make Homes ‘Unmarketable’: Lenders Live

Mortgage professionals have warned homeowners to exercise caution when installing spray foam insulation, with poor or inappropriate installation potentially affecting a property’s ability to secure mortgage finance.

The issue was discussed during Knowledge Bank’s Lenders Live panel following concerns about a growing number of homeowners installing spray foam insulation in roofs, lofts and attics in an effort to improve energy efficiency and reduce household bills.

While spray foam insulation can offer energy efficiency benefits when correctly installed, problems can arise where work does not follow appropriate manufacturer guidance or where the installation affects the ability to inspect the underlying roof structure.

The increase in energy costs has encouraged more homeowners to consider ways of improving the efficiency of their properties, while government-backed initiatives have also supported investment in energy-saving measures.

However, the potential mortgage implications of spray foam insulation have highlighted the importance of homeowners thoroughly researching any proposed work and using appropriately qualified and reputable installers.

Mortgage considerations

Enness Global co-founder and managing director Hugh Wade-Jones highlighted that spray foam insulation is the type of issue that borrowers and brokers may not immediately consider when arranging mortgage finance.

In many cases, the presence of spray foam may not become apparent until a valuation or survey identifies it later in the mortgage process. This can create unexpected complications and potentially delay a transaction.

As mortgage underwriting and property assessments have become increasingly detailed, questions surrounding previous alterations, improvements and structural works may need to form part of the initial information gathered by brokers when advising clients.

The issue also demonstrates the importance of understanding any works carried out to a property before purchasing or refinancing. Where there is uncertainty, a more detailed survey may help identify potential concerns that could affect future lending decisions.

Improving industry guidance

The Property Care Association and Residential Property Surveyors Association have been working with manufacturers, installers, surveyors, valuers and lenders to improve understanding of spray foam insulation and develop clearer assessment and inspection procedures.

The aim is to provide greater clarity around the differences between appropriate and problematic installations, helping surveyors and lenders make more informed decisions while giving homeowners a better understanding of the potential risks.

As energy efficiency becomes an increasingly important consideration for homeowners, landlords and lenders, ensuring that improvement works are properly researched, installed and documented will remain important in protecting both the property and its future marketability.