It claims that at the moment those who have spray foam insulation in their homes cannot sell or get equity release unless they spend thousands removing it.
This is because the lenders won't lend, the HomeOwners Alliance said.
Its chief executive Paula Higgins said: “For years spray foam roof insulation has been on a government list of approved measures.
“Homeowners have been able to access Government grants to reduce the cost of installing it in their homes.
“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.”
Before it makes it to ECO+ scheme, Higgins said, the Government needs to sort the mess out.
She added: “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 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.”
Business Secretary Grant Shapps launched the new scheme as part of an energy saving public awareness campaign.
The Government has allocated £1bn for the ECO+, which will launch in April 2023, for the next three years.
It will extend support such as loft insulation and smart heating controls to those who do not currently benefit from any other Government support to upgrade their homes.
Of the £1bn funding available through the new ECO+ scheme, around 80% of the funding will be made available for those households who are in some of the least energy-efficient homes in the country – that is, those with an EPC rating of D or below – and in the lower Council Tax bands.
The Royal Institution of Chartered Surveyors (RICS) has backed the new funding.
A spokersperson told Estate Agent Today: "With exception to materials that cause life safety concerns, RICS does not endorse or condemn any materials potentially included in grant schemes."
The Residential Property Surveyors’ Association (RSPA) sparked controversy among valuers, spray foam installers and surveyors last year after it issued guidance for its members to recommend the removal of spray foam insulation at every property they visit.
In a statement with the Property Care Association in December 2021, the RPSA said: “There may be as many as 250,000 homes with spray foam insulation in the loft, and the guidance being offered to their members is to adopt a highly cautious approach, recommending removal of the spray foam in almost every case.”
The guidance has since been retracted pending a full review after a group industry stakeholders, supported by the Insulation Manufacturers Association (IMA), started collaborating to standardise installation procedures and develop inspection protocols.
Simon Baker, president of spray foam installer Huntsman Building Solutions, hit back last night, claiming the product must be included.
He said: “As one of the most energy efficient and innovative insulation products available today, spray foam insulation must be included in the Government’s new ECO+ scheme, helping to make necessary home improvements more affordable.
“When installed correctly, spray foam provides a highly effective layer of thermal insulation, helping homes to retain more heat, reduce boiler usage and slash heating bills. As the Government targets a reduction in energy demand of 15% by 2030, spray foam insulation will be essential in bringing the UK’s housing stock in line with modern requirements.”
He said engaging a reputable and trained installer will ensure a quality installation and said lenders supported by their surveyors need to understand more about spray foam and adjust their approach.
Baker added: “As spray foam insulation becomes a common fixture in homes across the UK, lenders must be prepared to confidently assess each installation on its own merits.
“To support this, HBS has developed a training programme for surveyors, equipping them with the tools and insights to confidently approve correct and safe spray foam installations; the first training session is being launched in December 2022.
“By collaborating with the IMA, alongside industry bodies such as the PCA, RICS and the RPSA, Huntsman Building Solutions will be an important member of the team in developing a code of practice which will be adopted by the industry.
“This would include requirements such as pre-installation assessments, the need for installations to be carried out exclusively by trained professionals and jobsite inspection. Every step of installation should also be fully documented to provide lenders, surveyors and homeowners the assurances they need to confidently adopt spray foam insulation.”
To give homeowners greater confidence when adopting spray foam insulation, he said Huntsman Building Solutions has already established and complies with these requirements through its authorised installers. All installations are fully documented and come with a 25-year warranty, providing complete transparency and traceability.