87% of Africans living and working in the UK have been turned down for a mortgage because of circumstances relating to the fact that they are a foreign national, according to research by new specialist lender Afin Bank.
Almost half (48%) said they were turned down because of their visa status, 41% said they were declined because of their nationality, and just under a third (30%) were rejected due to a lack of credit history in the UK.
28% said the lender would not accept their passport, while a further 28% said the lender would not accept their proof of funds.
Many potential borrowers from Africa living and working in the UK say they have been put off applying for a mortgage, citing reasons such as concerns about their visa status (28%); nationality (24%); or lack of UK credit history (20%). A quarter said they had already been told by the bank they had their current account with that they would not be considered for a mortgage.
Even of those that had successfully applied for a mortgage, a quarter (25%) said they had found the application process difficult. 92% of respondents told Afin Bank that they felt African nationals are underserved when it comes to mortgages and financial services in the UK.
However, there is clearly a demand for mortgages from the African community, with the research revealing that two out of five (41%) of those surveyed currently have a mortgage.
38% have applied for a mortgage in the last 18 months, 36% are planning to apply for a mortgage in the next 18 months, and 31% are planning to apply for a remortgage.
Alan Davison (pictured), chief commercial officer at Afin Bank, said: “There are more than 1.5 million African nationals living in the UK, contributing to our economy, running businesses and building vibrant communities. Yet most of them are struggling to put down roots in this country and buy their own home because mainstream lenders are not able to support their needs.
“Afin Bank was created out of the experiences of Africans unable to get support from UK financial services providers and our research shows that this is still very much the case. We understand the circumstances of African nationals and other foreign diaspora in the UK, so our proposition will take into consideration factors such as credit history and visa status to be able to help families get the mortgages they need.”
Afin Bank’s findings resonate with members of the African diaspora in the UK, such as Ezikpe Kalu, managing director of Diffstone Property, a real estate development and investment business based in the North West. Kalu comes from Nigeria originally and has been living and working in the UK for 18 years.
He said: “As a British Nigerian, I know first-hand how complex and frustrating it can be to access mortgage finance, especially when your background doesn’t quite fit the system. When I applied for my first mortgage, despite stable employment and strong income, I felt I still had to prove I belonged.
“Years later, not much has changed. I speak with professionals such as nurses, engineers and business owners who are more than mortgage-ready but are still being overlooked. Afin Bank brings a refreshing, culturally aware approach to lending. For many, it represents more than a mortgage. It is a real chance for many to finally put down roots.”
Afin Bank received its banking licence Authorisation with Restrictions in October last year and is backed by African reinsurer WAICA Re, which has committed £62m to setting up the bank. It is on track to fully launch later this year offering a range of residential and buy-to-let mortgages for borrowers in the UK and certain overseas based borrowers.
While designed with Africans and other foreign nationals living in the UK in mind, Afin Bank says its lending products may also be suitable for UK resident customers, including high-net-worth professionals and self-employed borrowers.
