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

High Street Lenders Deem 1.5 Million UK Properties 'Unmortgageable'

More than 1.5 million properties in the UK are considered too risky for standard mortgages by high street lenders, according to new research. Specialist lender Together reports that these homes, representing 6% of the total housing stock, are labelled 'unmortgageable' due to not meeting traditional loan criteria.

Properties affected include thatched cottages, high-rise apartments, homes located too close to commercial premises, or those lacking workable kitchens or bathrooms. These types of properties may be automatically rejected by banks' lending processes.

Together's research found that 21% of buyers have already had a mortgage application rejected, while 32% have faced a significantly reduced pool of lenders willing to consider their case. Despite these challenges, many buyers continue with their purchases. The research indicates that 31% of buyers are seeking renovation or restoration projects, and 28% are motivated by the potential to add value and sell the property for profit. Lower purchase prices are also a key attraction, cited by 28% of buyers overall and 32% of those buying as their main residence.

Rental income potential is another incentive, with 35% of buyers purchasing these properties as buy-to-let investments. The findings highlight that a significant number of homes are effectively out of reach for ordinary buyers, contributing to wider supply issues in the UK property market.

For letting agents and inventory clerks, these trends may influence the types of properties entering the rental market and the challenges associated with managing or letting homes that fall outside standard mortgage criteria.