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

Over 1.5 Million UK Homes 'Unmortgageable' with Mainstream Lenders

More than 1.5 million homes across the UK could be rejected for standard mortgages as they fall outside mainstream lending criteria, according to research from lender Together. The company said these properties, representing around 6% of the UK’s 28 million residential homes, may struggle to secure finance from many high street banks.

Together’s research identified several factors that can make properties unmortgageable with mainstream lenders. These include construction type, property condition, and location. Specific examples cited are thatched cottages, high-rise apartments, homes near commercial premises, and properties lacking functioning kitchens or bathrooms.

Despite these challenges, Together found there is still notable buyer interest in such properties. Among those who had purchased or seriously considered buying a property considered difficult to mortgage, 44% said affordability and value for money were the main attractions. Additionally, 31% were motivated by the prospect of a renovation or restoration project, while 28% saw an opportunity to add value and sell for a profit in the future.

The research also highlighted investment motivations. For buyers purchasing as their main residence, 32% cited lower purchase prices as the biggest draw. Among buy-to-let investors, 35% pointed to rental income potential as the main appeal.

However, the study found that 21% of respondents had already experienced a mortgage application rejection, and 32% said they had access to a much smaller pool of lenders willing to consider their application.

Ryan Etchells, chief commercial officer at Together, commented 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 these properties do not feature in official housing shortage figures but represent part of the wider supply problem and highlight the scale of investment needed to bring more homes back into the ‘mortgageable’ market. Etchells also said that many borrowers remain unaware of alternative finance options available to them.

For UK letting agents and inventory clerks, these findings underline the importance of understanding the types of properties that may face mortgage challenges and the ongoing demand from buyers and investors for homes outside standard lending criteria.