Nikka Sulton

More than 1.5 million residential properties across the UK are considered difficult or impossible to finance through traditional high street mortgage lenders, creating challenges for buyers while also opening up opportunities for investors willing to think differently.

According to research from specialist lender Together, around 6% of the UK’s estimated 28 million homes fall outside the lending criteria typically used by mainstream banks. While many of these properties are automatically rejected by conventional mortgage providers, they continue to attract buyers looking for lower purchase prices, renovation projects and long-term investment potential.

Why Some Properties Are Considered Unmortgageable

Not every home meets the standard lending requirements set by major banks. Many lenders rely on automated underwriting systems that quickly assess whether a property fits their risk profile.

Homes that fall outside these guidelines may struggle to secure a traditional mortgage, even if they have significant value or development potential.

Examples include:

Thatched cottages
High-rise flats
Properties located close to commercial premises
Homes without a functional kitchen or bathroom
Buildings requiring substantial refurbishment

While these properties may not qualify for a standard mortgage immediately, they are not necessarily impossible to finance. Many buyers instead turn to specialist lenders who are able to assess each case individually rather than relying solely on automated lending criteria.

Lower Prices Continue to Attract Buyers

For many purchasers, the biggest appeal of these properties is affordability.

Research found that 44% of buyers who had either purchased or seriously considered an unmortgageable property believed it represented better value than buying a more conventional home.

More than a quarter identified the lower purchase price as the main reason for considering this type of property. The attraction was even stronger among owner-occupiers, with almost one-third saying affordability was their primary motivation.

In a market where rising house prices and higher borrowing costs continue to challenge buyers, properties that require extra work can often offer a more accessible route onto the property ladder.

Strong Appeal for Investors

The investment potential of these homes is another major draw.

Among buy-to-let purchasers, 35% said the opportunity to generate future rental income was the biggest advantage of purchasing a non-standard property.

Others viewed these homes as value-add opportunities.

Nearly one-third of buyers were specifically searching for renovation or restoration projects, while more than a quarter planned to improve the property before selling it for a profit.

For experienced investors, purchasing below market value and increasing a property’s worth through refurbishment can provide attractive long-term returns.

Buyers Understand the Risks

Purchasing an unmortgageable property is rarely straightforward, and many buyers recognise the additional challenges involved.

Around 31% said they understood the process would be difficult but believed the rewards justified the effort. A further 21% felt the potential benefits outweighed the risks involved.

Some buyers also saw these homes as opportunities that other purchasers were unwilling to pursue, allowing them to secure properties with less competition.

However, not everyone fully appreciated the complexity of buying this type of home. A smaller proportion admitted they had underestimated the challenges or were unaware of the risks when they first began the purchasing process.

Mortgage Challenges Remain

Accessing finance continues to be one of the biggest hurdles.

More than one in five prospective buyers reported having a mortgage application declined, while almost one-third found that very few lenders were willing to consider financing their chosen property.

Traditional lenders often avoid properties that fall outside standard criteria, making it difficult for buyers to proceed unless they explore alternative lending options.

Specialist lenders, however, can often take a more flexible approach by considering the property’s overall potential and the buyer’s plans rather than relying solely on automated lending decisions.

Alternative Finance Could Unlock More Opportunities

Ryan Etchells, Chief Commercial Officer at Together, said a significant number of homes remain effectively inaccessible because many mainstream lenders are unwilling to finance them.

He believes demand for these properties remains strong, particularly among buyers looking to renovate, improve or invest. However, many prospective purchasers are still unaware that specialist finance options exist and may provide a viable route to securing these types of homes.

As affordability pressures continue across the UK housing market, alternative lending solutions could play an increasingly important role in helping buyers access properties that would otherwise remain beyond reach.