A new survey of mortgage brokers has revealed the scale of the challenge facing foreign national buyers in the UK.
The survey, completed by 295 brokers on Gen H's panel in May, found that just 27% of respondents consider foreign national cases straightforward to place. The findings point to systemic criteria gaps that are locking out a large and growing group of prospective homeowners.
When asked to identify the biggest obstacles to placing foreign national mortgage applications, brokers were largely aligned in their frustrations.
51.3% of respondents said low maximum LTVs, 47.8% pointed to fewer lender options, 43.9% said restrictive criteria on eligible visa types, 31.1% noted restrictive criteria on time remaining on the visa, and 30.7% said restrictive criteria on time in the country.
Higher rates, thin credit files and minimum income thresholds were also highlighted as significant barriers.
According to the House of Commons Library, immigration increased the UK population by around 2.2 million people in the three years following 2021. Four years on, many have built the foundations for homeownership – stable employment, savings for a deposit – but the mortgage market is still not set up to accommodate them.
Gen H's analysis of available criteria across the market finds the average maximum LTV for foreign nationals sits at just 85%, and only then if the household earns around £75,000 or more. Below that income threshold, the maximum LTV falls further. However, most are first-time purchasers with deposits of 5% or 10% and average salaries.
At Gen H, nearly one in three mortgage applications includes at least one foreign national applicant, yet arrears across the entire book remain below 0.2% – far below the high street – and the lender says foreign nationals are not overrepresented within that figure. For owner-occupiers with a clean credit history, Gen H says life events, not nationality, are the drivers of missed payments.
Pete Dockar, Gen H’s chief commercial officer, said: “These findings are revealing because they illustrate how slow the industry is to change. 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 6 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 What is true is that too many big lenders have lending policies that are a decade out of date.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.”
