Can I Get Equity Release With Spray Form Insulation?

If you’ve heard of people getting loans against their home and not having to repay a single penny until they die or go into long-term care, then you’ve heard of equity release.

With a lifetime mortgage or a home reversion plan, equity release consumers get tax-free cash in the form of an equity release loan that can be spent on almost anything you could think of.

In order for the equity release provider to get their money back, they put the customer’s property up for sale when the customer dies or enters permanent care.

What is Spray Foam Insulation?

Spray foam insulation is an energy-efficient type of insulation that is made of isocyanate and polyol resin. Unlike traditional insulation, such as fibreglass, it can be sprayed in place.

Around 250,000 people in the UK have spray foam insulation in their property [1].

There are two types of spray foam insulation:

• Light-density open-cell spray foam insulation: Also known as half-pound foam, this is a lower quality type of insulation as it’s softer and more open (meaning it doesn’t provide as much warmth). However, it’s the more affordable option, making it attractive for many buyers. As half-pound foam is only semi-rigid, it can expand to fit in unusual spaces, which makes it ideal for non-conventional surfaces.
• Medium-density closed-cell spray foam insulation: Medium-density closed-cell spray foam insulation is also known as two-pound foam. It’s the more expensive option as it’s harder and offers better insulation, as well as being more difficult to remove. With this type of insulation, there’s a much lower chance of moisture and air getting into a space, so it’s ideal for people looking for as much insulation as possible.

How to Tell Whether Your Property Has Spray Foam Insulation?

Spray foam insulation has a distinctive look, so you should be able to tell whether it is a feature of your property simply by looking.

You will mostly find it in lofts, but it could also be in floors, cavity walls, basements, and external walls.

Spray foam in lofts is highly visible; you will most likely see the foam on the floor. If it’s in your roof, it’s harder to see, but it will still be visible over your roof tiles and possibly rafters.

Spray Foam Insulation Vs Traditional Insulation

Many people install spray foam insulation for its energy-efficient benefits. As it provides high-quality insulation, more heat can be preserved. On the other hand, traditional building insulation is not as thick as spray foam, and it isn’t as effective at preserving energy.

Spray foam insulation is also more versatile than traditional insulation. As it can be sprayed onto surfaces, there are fewer limitations when it comes to the installation of spray foam. For example, spray foam material is often used for soundproofing as it can be easily applied to walls.

The overall cost of spray foam insulation tends to be lower than traditional insulation. This is because it is more efficient, and therefore it leads to cheaper energy bills. That being said, the initial purchase is often much more expensive.

Traditional insulation can be praised for its low-maintenance qualities (it can be self-installed), the fact it’s cheaper to begin with, and it’s less likely to lead to mould (which can cause roofs to rot).

There are concerns with the safety of traditional insulation, given that fibreglass is often used, with formaldehyde as the binding agent. Formaldehyde is an irritant that can cause coughing, watery eyes, chest pain, nausea, and even pneumonia.

Yet, spray foam insulation has also been criticised for safety reasons. Spray foam installations can trigger the development of breathing issues, and poorly installed insulation can result in structural safety problems.

What’s more, the watertight quality of spray foam means there is a high potential for rotting.

Do Lenders Approve Properties With Spray Foam Insulation?

The majority of mortgage lenders do not approve properties that have spray foam insulation where it has been incorrectly installed in your loft. This may come as a surprise given the many benefits of spray foam insulation, but the safety issues are a huge risk for lenders.

Mortgage lenders do not want to deal with properties that run the risk of developing insecure roof timbers, weakened or decayed roof supports, and restricted air circulation.

There is less likely to be an issue where the insulation has been installed in your walls, although this may be a concern if the surveyor’s report concludes this is causing damp or condensation.

Spray form is correctly applied in your attic when it only appears on the attic floor, replacing traditional fibre insulation.

You can tell when it has been applied incorrectly in your attic, because it will have been sprayed on the inside section of your roof.  In this situation, you can only get equity release once the incorrectly applied spray form has been removed, and a RICS surveyor is satisfied the property is undamaged.

You can see a variety of images where spray form has been incorrectly applied on Google.

Unfortunately, removing incorrectly applied spray form from your timer frame can be costly. If left, the spray form can increase the risk of the timber frame decaying, and also lead to condensation and dampness as it will form an air barrier between the form and your roof, meaning that moisture is unable to escape. [2]

The cost of having spray form removed from the inside of your roof is around £3,000-£4,0000.

Do not attempt to remove spray form yourself. Doing so means toxic dust particles could be released, which is extremely bad for your health. You will need to contact and pay for a professional spray form removal company to undertake this work on your behalf.

You may also be able to claim the cost of this from the company that negligently installed your spray form insulation. You should try to find a solicitor with experience in this area to act on your behalf.

Equity Release & Spray Foam Insulation – Is it Possible?

Traditionally, no one with spray foam insulation could release equity. Lenders would refuse equity release to anyone in this position.

However, this has recently changed, and it is now possible. With the right lender, you could get a tax-free loan even with spray foam insulation – although you will be required to remove the spray foam within a fixed period of time as per the lending criteria.

There is more chance that your property will be approved if there is evidence the spray foam was installed when the property was built. In other words, you haven’t had the spray foam installed in recent years.

If there has been any damage to your property from the spray foam, you will not be able to get a lifetime mortgage or a home reversion plan. In fact, even traditional mortgages are very difficult to access when damage exists.

Equity Release & Spray Foam Insulation – Can I Release Equity After Removing My Spray Foam Insulation?

Once your spray foam is gone, you no longer have to worry about being rejected by an equity release company on the basis of insulation. You can make an application just like anyone else would.

We always encourage our readers to speak to an equity release specialist before filling out the application, but this is even more important if you have had spray foam removed.

There is a chance that having had spray foam in your property could limit the equity release plans you are eligible for. Your adviser will be able to tell you which plans are still available so that you don’t have to submit an application only to have it rejected.

FAQs About Spray Foam Insulation

Below, we answer common questions about spray form insulation

1. Is spray foam insulation costly?

The cost of spray foam insulation depends on how much insulation you need. It tends to cost around £30-90 per square metre, so people with larger properties will face a heftier bill.

This is generally perceived as costly, but the long-term savings potential must also be considered. If your energy bills are currently out of control, this one-off cost could lead to decreased outgoings in the future.

2. Can I install spray foam insulation myself?

It is possible to do this, but we strongly advise against it. The potential dangers of installing spray foam yourself, as well as the higher chance of error, means you should find a trained professional to do it for you.

3. Can I get spray foam insulation after releasing equity?

No, you cannot get spray foam insulation after releasing equity from your home. All equity release lenders require their properties to be free from spray foam, regardless of the equity release product that the consumer has purchased.

4. Will spray foam insulation affect my property value?

In some cases, spray foam has reduced the property value of people’s homes. With the risk of a decayed roof comes a lower value, as buyers don’t want to deal with any structural issues in the future.

Find Out More About Equity Release and Spray Foam Insulation

If you have more questions about equity release and spray foam insulation, don’t hesitate to get in touch with an Equity Release Warehouse expert on 0330 058 1579.

We are here to put your mind at rest about the equity release rules regarding spray foam insulation. If we determine that your property isn’t eligible for an equity release mortgage, we will help you figure out what to do next.

This could be finding a specialist equity release provider that allows spray foam insulation upon application, directing you towards advice on removing spray foam insulation or encouraging you to consider alternatives to equity release.

References

[1] Has spray foam insulation made your property tough to sell? With some 250,000 homes at risk, we answer the burning questions https://www.thisismoney.co.uk/money/news/article-11559263/Has-spray-foam-insulation-property-tough-sell.html

[2] https://commonslibrary.parliament.uk/spray-foam-insulation-and-mortgages/#:~:text=If%20installed%20incorrectly%2C%20spray%20foam,can%20affect%20a%20roof%20structure.