Criteria gaps and low LTV limits leave many creditworthy buyers without mortgage options
A survey of mortgage brokers has highlighted widespread lending failures affecting foreign national buyers in the UK, with just 27% of respondents describing such cases as straightforward to place.
The research, conducted by residential lender Gen H, gathered responses from nearly 300 brokers on its panel. The findings point to significant criteria gaps across the market that are preventing a substantial and growing pool of prospective buyers from securing mortgages.
Brokers identified low maximum loan-to-value ratios as the single biggest obstacle, cited by 51.3% of respondents. Fewer lender options were raised by 47.8%, while 43.9% pointed to restrictive criteria on eligible visa types.
Around a third flagged limitations on time remaining on a visa (31.1%) or time spent in the country (30.7%) as a barrier. High rates, thin credit files and minimum income thresholds were also identified as significant hurdles.
According to the House of Commons Library, net immigration added approximately 2.2 million people to the UK population in the three years following 2021. Many of those individuals have since accumulated stable employment and deposit savings, yet the mortgage market has not adjusted to serve them.
Gen H's own analysis of market criteria found that the average maximum LTV available to foreign nationals stands at 85%, and only where household income reaches around £75,000 or more. Below that threshold, maximum LTV falls further — creating a near-insurmountable barrier for the typical applicant, who is often a first-time buyer with a 5% or 10% deposit and an average salary.
Gen H said its lending data does not support the assumption that foreign nationals carry elevated credit risk. The lender said nearly one in three of its mortgage applications includes at least one foreign national applicant, yet arrears across its full book remain below 0.2% — below high street levels — and foreign nationals are not overrepresented in that figure.
"These findings are revealing because they illustrate how slow the industry is to change," said Pete Dockar (pictured right), chief commercial officer at Gen H. "We've had four years to prepare for the maturation of this cohort, and yet there has been little to no criteria improvement at the big six lenders.
"The impression lingers that this group is inherently riskier than people who were born here, but that is simply not our experience. What is true is that too many big lenders have lending policies that are a decade out of date.
"From a credit risk perspective, we believe anyone with a track record of sustainable income and affordability should have the opportunity to access homeownership."
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