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Co-op applauded by brokers for policy enhancements in relation to spray foam

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ended 09. May 2025

Brokers have welcomed some major policy enhancements from the Co-op in relation to spray foam, an issue that leaves many homes unmortgageable.

One, Justin Moy of EHF Mortgages, said: “Mortgage lenders are not only improving rates but their lending policy is becoming more flexible, and the acceptance of spray foam insulation is a significant change by the Co-op. Many properties have been made unmortgageable through the use of spray foam in the roof, and this move by the Co-op gives hope to those trying to sell such properties."

Another, Adam Stiles of Helix Financial Partners, also welcomed the move: “It's great to see some constructive and pragmatic changes from the Co-op here to help the many people affected by spray foam issues. Lenders need to constantly evolve to the reality of homeownership and the challenges many face. Well done Co-op for these real-world changes.” Michelle Lawson of Lawson Financial, concluded: “There are some great policy enhancements here to help with the ongoing spray foam saga and those with smaller deposits wanting to buy flats but who are being restricted by lender policy. For its spray foam update in particular, the Co-op deserves a clap of the hands.”

The Co-op announced it will now lend up to 95% LTV on non-new build flats, on properties properties with Spray Foam insulation with appropriate controls in place to manage the associated risks, as well as on properties on land of up to 10 acres. The lender will also offer New Build incentives of 5% of the purchase price PLUS any Stamp Duty contribution. Views from brokers, below.

5 responses from the Newspage community

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Adam Stiles
Managing Director at Helix Financial Partners
It's great to see some constructive and pragmatic changes from the Co-op here to help the many people affected by spray foam issues. Lenders need to constantly evolve to the reality of homeownership and the challenges many face. Well done Co-op for these real-world changes.
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Michelle Lawson
Director at Lawson Financial
There are some great policy enhancements here to help with the ongoing spray foam saga and those with smaller deposits wanting to buy flats but who are being restricted by lender policy. The New Build incentives with Stamp Duty, in addition to the 5% purchase price, will also give the New Build sector a real boost. For its spray foam update in particular, the Co-op deserves a clap of the hands.
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Ben Perks
Managing Director at Orchard Financial Advisers
Too many people have been convinced that spray foam is the way forward, not realising that in some cases it can render their house unmortgageable. So it’s great to see a lender looking at ways to help people that have done this.
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Justin Moy
Managing Director at EHF Mortgages
Mortgage lenders are not only improving rates but their lending policy is becoming more flexible, and the acceptance of spray foam insulation is a significant change by the Co-op. Many properties have been made unmortgageable through the use of spray foam in the roof, and this move by the Co-op gives hope to those trying to sell such properties. Other lenders offer similar, but not many, and those other lenders that do accept spray foam require a huge premium on standard high street rates.
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David Stirling
Independent Financial Adviser at Mint Wealth
Spray foam insulation is often viewed as a cost-effective and efficient solution, but many lenders are wary of its potential to restrict ventilation and contribute to timber decay in a property's roof due to increased condensation. As a result, properties with spray foam insulation are frequently deemed unmortgageable. It's encouraging to see Co-op revising its criteria and introducing a mortgage product that can potentially accommodate these cases. Many homeowners install spray foam without understanding the impact it can have on their mortgage options, and since the insulation is difficult and costly to remove, having a new lending option is a welcome development.