Approximately 1.5 million properties across the UK are deemed too risky for standard mortgages by mainstream lenders, according to research from specialist lender Together. This figure represents 6% of the total housing stock.
Properties that fail to meet traditional lending criteria include thatched cottages, high-rise apartments, and homes located too close to commercial premises. Those lacking functional kitchens or bathrooms are also frequently rejected by banks' automated assessment systems.
The research found that 21% of buyers have experienced a mortgage application rejection. Furthermore, 32% encountered a significantly reduced pool of lenders willing to consider their case, highlighting a structural issue within the UK housing market.
Despite these obstacles, buyers continue to pursue such properties. Around 31% were seeking renovation or restoration projects, while 28% viewed them as opportunities to add value before reselling. Lower purchase prices attracted 28% of buyers overall, rising to 32% among those buying the property as their main residence. Rental income potential also drives demand, with 35% acquiring these properties as buy-to-let investments.
Ryan Etchells, Chief Commercial Officer at Together, stated that the number of properties mainstream lenders are reluctant to finance means a significant number of homes are effectively out of reach for ordinary buyers. He added that these properties contribute to the wider supply problem and require investment to become mortgageable.