Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.

1.5 Million UK Properties Unmortgageable, Research Finds

Approximately 1.5 million properties in the UK are considered too risky for standard mortgages by mainstream lenders, according to research from specialist lender Together. This figure represents 6% of the total UK housing stock.

The research highlights that these properties include thatched cottages, high-rise apartments, homes located too close to commercial premises, or those lacking functional kitchens or bathrooms. Such properties often fail to meet traditional lending criteria and are frequently rejected by banks’ automated assessment systems.

Together’s research found that 21% of buyers have experienced a mortgage application rejection, while 32% encountered a significantly reduced pool of lenders willing to consider their case. The findings point to a structural issue within the UK housing market that extends beyond current market conditions.

Despite these challenges, buyers continue to pursue unmortgageable properties. The research indicates that 31% of buyers were seeking renovation or restoration projects, while 28% viewed these properties as opportunities to add value before reselling. Lower purchase prices attracted 28% of buyers overall, rising to 32% among those purchasing the property as their main residence.

Rental income potential is also a key driver, with 35% of buyers acquiring these properties as buy-to-let investments. The trend comes as property transactions face extended completion times, adding further complexity to the purchasing process.

Ryan Etchells, Chief Commercial Officer at Together, stated that a significant number of homes are effectively out of reach for ordinary buyers due to mainstream lenders’ reluctance to finance them. He noted that while these properties do not feature in official housing shortage figures, they represent part of the wider supply problem and highlight the scale of investment needed to bring more homes back into the mortgageable market.

The research suggests that the 1.5 million properties excluded from standard mortgage products represent both a challenge and an opportunity within the housing sector. For investors and buyers willing to navigate specialist lending routes, these properties offer potential entry points at lower price points, though they typically require additional capital for improvements to meet standard lending criteria.