Property advice website HomeOwner Alliance are now campaigning to ensure spray foam insulation does not make it onto the list of approved insulation under the government’s ECO+ scheme.
Announced as part of the Autumn Statement, the government's ECO+ scheme will see £1bn in funding made available to improve energy efficiency in homes.
Around 80 per cent of the funding will be used to upgrade households with some of the least energy-efficient homes - those with an EPC rating of D or below and those in the lower council tax bands.
A consultation is currently open for the programme and it is not year clear what sort of insulation will be included in the scheme.
FTAdviser understands the Department for Business, Energy and Industrial Strategy plans that any product must be installed in accordance with the standards set by the scheme and building regulations.
Paula Higgins, chief executive of HomeOwner Alliance said: “For years spray foam roof insulation has been on a government list of approved measures and homeowners have been able to access government grants to reduce the cost of installing it in their homes.
“So we are shocked and dismayed that homeowners doing the right thing are now being financially penalised: they either pay over the odds to remove the spray foam or remain stuck with homes they will find difficult to remortgage or sell.”
Higgins added that the government needs to “sort the mess out”.
“Homeowners can’t be expected to pay for government-backed energy efficient measures only to have to pay twice over again to get it removed when they come to sell or remortgage.
“If lenders and surveyors can’t agree on a sensible view on spray foam insulation then homeowners need to be warned up-front and the government needs to require insulation companies to run a warning of the consequences of installation on their marketing material.”
FTAdviser approached a number of mortgage brokers to gauge how widespread of an issue this is when it comes to remortgaging.
The consensus was that it is not a widespread problem, but that it can be a particular issue for borrowers who have fewer options of lenders, like self-employed individuals or those with bad credit.
Chris Schutrups, founder of the Mortgage Hut said: "Some lenders will decline it, some will leave it down to the valuers comments and others are fine with it.
"An example we had was that Accord Mortgages declined a clients property based on spray foam, we managed to replace it with Virgin Money."
Schutrups added: "Our advice would be if you're going to have it done, make sure it's done by a reputable company and you get the correct paperwork."
