PARLIAMENTARY DEBATE
Spray Foam Insulation: Property Value - 6 December 2024 (Commons/Commons Chamber)

The green homes grant voucher scheme was introduced in July 2020 under the Department for Business, Energy and Industrial Strategy. The scheme was part of the Department’s green recovery from the pandemic and promised to contribute to the goal of net zero carbon emissions by 2050. Some £1.5 billion of funding was made available by the Chancellor of the Exchequer to offer homeowners the opportunity to reduce emissions and improve energy efficiency. Individual homeowners could apply for up to £5,000 of funding to cover two thirds of the cost of eligible energy efficiency measures.

Between September 2020 and March 2021, just short of 50,000 vouchers were paid to homeowners that could be used for a variety of improvements, including heat pumps, energy efficient windows and doors and, importantly, spray foam insulation. The exact number of vouchers given out for use on spray foam insulation is unknown. However, almost 14,000 vouchers were used for loft and pitched roof insulation measures which could have included spray foam.

Spray foam insulation is a form of liquid insulation applied with a spray gun, typically in roofs, lofts and attics. This is where the problem occurs. It has the potential to improve thermal efficiency if applied correctly. However, it can cause significant damage when it is not done correctly. Homeowners have reported problems in timber-framed roofs following installation. It restricts air circulation causing condensation that ultimately damages the property and has resulted in signs of decay and dampness in timber framed roofs.

Homeowners put faith in the Government’s recommendations and carried out this work with the promise of enhanced energy efficiency. Instead, they have been met with thousands of pounds of remedial works and difficulty in selling their properties. An unregulated trade of cowboy builders offering to carry out remedial work has also emerged. Homeowners are being convinced to spend thousands on improvements when they are not always necessary.

The Government need a cross-departmental strategy to address the issues arising from the green homes grant voucher scheme. We must see action to support affected homeowners with a compensation scheme, regulation of removal companies and steps to tackle the blanket ban that some mortgage providers have placed on homes with the insulation. There are important lessons to be learnt here to ensure future Government home improvement schemes do not have the same unintended consequences.

Spray foam insulation has the potential to cause such severe damage that many mortgage lenders have issued blanket refusals. BBC research demonstrated the varied approach mortgage lenders are taking on the issue. Of the 20 largest mortgage providers, seven have said that they refuse to lend on any properties with any form of spray foam insulation. The other 13 stated that extra information and surveys would likely be required and that mortgages would be offered only on a case-by-case basis. That is adding additional costs to people when they come to mortgage, remortgage or sell their home.

My constituent Tom described the utter devastation he felt when the sale of his house fell through after surveyors discovered spray foam insulation. It was only once the buyer informed Tom that they would not be able to get a mortgage approved on the property that he learned of the dangers of this type of insulation. Without the availability of grant money, Tom and his family would never have considered installing spray foam insulation. However, they wanted to do their bit for the environment through the green homes grant scheme.

There are lots of good people out there like Tom trying to make efforts to help reduce their carbon emissions and contribute to net zero, and they have fallen foul through no fault of their own. Tom applied for a voucher through a scheme that would cover two thirds of the cost of the upgrades and put in £1,000 of his own hard-earned money, too. After receiving a list of Government-approved installers, Tom and his family chose one that they believed met the standards to carry out the works.

After the sale of the house fell through, Tom began investigating potential remedial works to remove the foam and make his home suitable for mortgage. It soon became apparent that there were no affordable options. Tom has reported spending £4,000 on removal of the spray foam insulation, while another constituent, Norma, has been told that she will likely need to have all the roof timbers replaced due to the severity of the damage.

Earlier this year, the Health and Safety Executive published shocking data revealing that condensation could cause 25% of roof timber to decay within five years if spray foam was applied directly to roof tiles. However, the Insulation Manufacturers Association has warned that blanket bans on mortgages for homes with spray foam is leading to a new wave of rogue traders offering to remove foam for over-inflated prices, often causing greater damage in the process. It said that homeowners must not turn to cowboys for this removal service. When installed correctly by a regulated provider, spray foam is an effective form of insulation. It recommends that anyone with spray foam gets an independent assessment by a surveyor.

Prior to these conversations, the surveying industry had little knowledge of spray foam or how to adequately check its impact on roof timbers—that was what was leading to the blanket refusals. The Royal Institution of Chartered Surveyors, the Health and Safety Executive and insulation manufacturers have all worked to introduce protocols, which is a good first step to measure the impact of spray foam and ensure safe removal. It is imperative that we regulate rogue removal companies and stop them charging thousands of pounds to remove spray foam that could have been correctly installed.

Despite the previous Government having run and funded the scheme, they took a hands-off approach to the issue. We must not see the new Government follow that same approach. Instead, we need to see decisive action to support those facing the financial repercussions of the Conservatives’ lack of due diligence.

Several excuses have been used to justify the lack of action by successive Governments. Cowboy builders have been blamed for applying foam without the necessary expertise of proper surveys. While that has certainly contributed to the damage, that cannot act as a “get out of jail free” card for the previous Conservative Government.

There have been attempts to shift blame to the homeowner for using an installer that did not meet standards. In June 2022, when pressed on the possibility of redress for impacted homeowners, the Government argued that it was the responsibility of the installer and homeowner to decide whether to proceed with using spray foam insulation. However, all works using vouchers had to be done by a TrustMark-registered installer. TrustMark is a Government-endorsed quality scheme for tradespeople. The then Minister, Greg Hands, argued that the Government were not responsible for remedying the impacts of a scheme as TrustMark had

“a robust framework of operating requirements, including dispute management.”

Recipients of green grant vouchers were provided with a list of recommended installers to choose from, and my constituent Tom provided a copy of that TrustMark certification of lodgement that he received following the installation of the foam. TrustMark’s slogan is “Government-endorsed quality”. in this case, it is somewhat ironically branded.

While previous Governments have tried to wash their hands of responsibility for the disastrous impacts of the scheme, their involvement is well documented. TrustMark continues to operate as the only Government-endorsed quality scheme for home improvements. Understandably, homeowners trusted the recommendations and installers that the Government had endorsed. It was the responsibility of the Government and TrustMark to ensure that those installers were capable of carrying out the works to the necessary standard.

The Royal Institute of Chartered Surveyors has previously raised concerns with the Government about the lack of impartial advice under the scheme. Retrofit advisers were often the same as installers and salespeople. If the Government continue using TrustMark to regulate contractors, greater due diligence is required to ensure that those contractors are endorsed and have all the necessary knowledge, experience and training to carry out work to the highest standards.

So far, the Government have not taken action to understand the breadth of the impact of spray foam on recipients of green homes grant vouchers. I tabled a number of questions that the Minister kindly responded to yesterday in advance of this debate. We do not yet know the true number of people who might be impacted, but it is estimated to be in the tens of thousands, if not more. There is currently no clear data to ascertain how many homes have been impacted, which is why the Government need to investigate this fully.

Those who put their faith in the Government’s recommendations deserve their fullest attention to remedy the repercussions. The Government should take some responsibility for the negative implications of using the endorsed installers and methods. So far, that is not happened. They have recommended that consumers seek redress under the Consumer Protection from Unfair Trading Regulations 2008. However, a number of these installers have since gone bankrupt, making it incredibly difficult to claim against them. Consumers are therefore having to cover the cost of removal and repairs themselves. The Government have attempted to rid themselves of responsibility by arguing that the availability of terms of mortgages were an issue for lenders. Multiple issues are at play, including difficulties with TrustMark’s dispute management system. Also, many of those installers no longer exist, and companies have closed, as has the green homes grant scheme.

There are growing calls for compensation for those who have been impacted by spray foam insulation to cover not just the cost of large remedial works but their contributions to the initial works. The green homes grant voucher scheme only covered two thirds of costs in most cases. There needs to be proper support for people who had spray foam installed. My constituent Tom is very lucky that he had family support while they moved, and they had the opportunity to move out for remedial works to take place. Nevertheless, he remains £4,000 out of pocket.

We cannot ignore the issues caused by spray foam insulation. Potentially, 300,000 homes have spray foam insulation, and we need support to ensure these homes are sellable. The Government must step in and ensure that mortgage providers are not unnecessarily withholding mortgages. We must also limit the unregulated trade of foam removal companies preying on vulnerable households and causing further damage at hugely inflated prices. I have already attempted to address that with the Department. It is evident that cross-governmental issues are at play. Where there has been legitimate damage to properties from people who have used green homes grant money, the Government must step in and take action. Lessons need to be learned for future Government schemes, too.

Is important not to be alarmist. People should not remove spray foam until they have had it checked by a reputable surveyor with the necessary training and experience to deal with this issue. It is understandable that mortgage providers have to lend responsibly, but blanket bans contribute to mass panic and fuel the business of cowboy builders. We must make sure that mortgage providers are properly regulated, too. This is a nationwide issue—although the numbers are still unknown, people have reached out from across the country as this issue has come to the surface recently. I have had conversations with a number of colleagues across parties. My hon. Friends the Members for Oxford West and Abingdon (Layla Moran) and for Stratford-on-Avon (Manuela Perteghella) are working hard to get support for their constituents who have been affected.

It is key that people put their faith in the Government’s recommendation. These were good people who wanted to work hard towards the goal of net zero and save a little money along the way. They should not be left thousands of pounds out of pocket because of it. It is crucial that we not only provide them with the necessary support, but look to the future to make sure that we prevent this happening again with any other schemes.

I do not deny that the green homes grant scheme was well intentioned. Such schemes are crucial, and I do not want to diminish faith in future schemes. However, we need to rectify the schemes of the past. If not, people will not trust the schemes of the future. I also appreciate that this is not an issue of the current Minister but one of the many legacies of the previous Conservative Government and the disaster that ensued. I would welcome meeting and working with the Minister responsible for repair and regulation, and to ensure that this does not happen again. I appreciate the time that the Minister has already given to this issue in advance of today’s debate, and I hope that she will continue to work with me to address this issue.

Let me start by thanking the hon. Member for Harrogate and Knaresborough (Tom Gordon) for bringing this important issue to the attention of the House and highlighting the stories of his constituents.

This Government are committed to ensuring that all energy efficiency installations are done to the highest standards, and that proper consumer protection and redress are built into the system. That matters because building and maintaining consumer confidence and trust are critical to our delivering our warm homes plan and upgrading millions of homes across the country. We will do everything that we can to ensure that the system works for consumers. This is therefore a very important and a timely debate.

We understand the frustration and the difficulties that some homeowners with spray foam loft insulation have experienced when obtaining finance. This problem followed the publication of now-withdrawn guidance from a surveyors association in December 2021. The guidance said that surveyors could not comment on the condition of timber roof structures, or properly assess the risks once installed, given the nature of the product.

In response to the problems that some homeowners were having when obtaining finance, under the previous Government, the Ministry of Housing, Communities and Local Government worked with industry to publish several documents in 2023. These included a consumer guide, a code of practice for installers and an inspection protocol, alongside training for surveyors.

The Building Safety Regulator also completed research to understand moisture risk factors, which indicated that the risk is low if the relevant British standards are followed. Crucially, the inspection protocol now enables a surveyor to determine whether an installation was done properly and, therefore, to determine the risk level. This means decisions on mortgage products should be made on a case-by-case basis, and there should not be a blanket exclusion on mortgages.

I understand that progress is being made and, while some lenders will want to follow the advice of surveyors, most no longer have a blanket policy against lending where there is spray foam insulation. We are aware that just over 6,000 pitched roof insulation measures were installed using a voucher from the previous Government’s green homes grant voucher scheme, and some of these installations may have used spray foam products.

If products have been installed to the standard required under the scheme, we do not expect them to be removed. We expect that they are doing the work and are effective in the home. A surveyor should be able to use the available inspection protocol to make the proper assessment. Where the measure has not been installed correctly, however, homeowners should contact their installer or use the TrustMark dispute resolution process to seek redress. If the installer is no longer trading, the homeowner should contact the guarantee provider. The details of this should be in the paperwork they were given at the point of installation, or they will be available from TrustMark.

Although the system is working, we know that it is not working in too many cases and that people are falling between the cracks. We know that the standards and accreditation processes for Government schemes are too complex, and that accountability structures are not always clear. I am new to my role, but I am the first to admit that there is a job to do to improve the system so that, when problems occur, consumers get the right advice and redress without having to bang their head against the wall to get it. The Government are determined to address this.

The Government’s ambitious warm home plans will upgrade millions of homes across the country to make them warmer and cheaper to run, from installing new insulation to rolling out solar panels and heat pumps. We will review the consumer protection framework as part of this plan, ensuring clear lines of accountability and clear and easy redress mechanisms so that consumers can trust the system.

The plan will also outline the further action we intend to take to drive up quality and standards, and to support the supply chain to grow in size and competence. This will include investing in training and supporting trusted small businesses that work in the community to join the supply chain.

We understand that the hon. Gentleman’s constituents, and constituents across the country, face this issue, and we are looking into it to understand the size of the problem and what we can do in response. More fundamentally, people should be in no doubt that we are committed to building consumer protection and trust, because that is the only way we can take the country on the journey as we try to upgrade millions of homes.

I thank the hon. Gentleman for raising the profile of this issue, for raising the stories of his constituents and the difficulties they have faced, and for giving us the opportunity to highlight the avenues that are available for affected consumers.

Question put and agreed to.