Lenders have denied claims they have been turning down mortgage applications from European Union citizens due to uncertainty following the Brexit vote.
The rights of European Union nationals living in the UK are currently under negotiation as part of the British government’s Brexit talks.
While EU nationals’ right to reside in the UK currently remains unchanged under freedom of movement rules, concerns have been expressed that the uncertainty surrounding the final outcome of talks has already led to discrimination.
Mortgage lenders typically have the same requirements for EU nationals as for UK citizens, and are willing to lend to applicants with a UK bank account and a permanent job in the UK.
But in September, the Evening Standard reported some lenders had “become nervous” and were turning down customers for mortgages or loans due to uncertainty about their status once the UK leaves the EU.
The article was based on evidence submitted to the London Assembly’s EU Exit Working Group meeting on 19 July by Dr Charlotte O’Brien, senior lecturer at the University of York’s Law School.
She told the assembly: “In terms of banking, EU nationals are…reporting difficulties that they did not have before the referendum. Opening bank accounts, getting mortgages - because, again, mortgages are based on your future entitlement - and employment.”
But 14 major lenders contacted by FTAdviser denied making any changes to their criteria around EU nationals following the Brexit vote on 23 June 2016.
A Santander spokesperson said: “We treat EEA nationals in the same way as we do UK nationals. We would do the same checks on income, affordability and criteria.”
A spokesperson from Yorkshire Building Society said: “Any customers who apply for a mortgage with us are assessed in line with our lending criteria, which has not changed in any way as a result of the EU referendum.
“While we have no plans at present to change our lending policy, we do continually review all areas of the business to ensure we are responsibly meeting customers’ needs.”
A spokesperson for Virgin Money said: “We have not made any changes to our lending policy regarding EU nationals and have no plans to tighten criteria.”
TSB, RBS, Halifax, Co-op Bank, Coventry Building Society, Skipton Building Society, Leeds Building Society, Nationwide, HSBC, Barclays and Clydesdale all denied making any changes to their lending policies following the Brexit referendum.
Dr O’Brien said the information about EU nationals experiencing mortgage difficulties had been gathered as part of a scoping project carried out with advisers from different Citizens Advice Bureaux around the UK.
She added that all the research was anonymous, and there was no concrete data available about lenders rejecting mortgage applications of EU nationals.
FTAdviser contacted the Citizens Advice Bureau press office in an attempt to obtain more details, but they said they had no data on the subject.
Mortgage brokers Martin Stewart, director of London Money; Oliver Marley, mortgage adviser and head of research at London-based Independent James; and Ray Boulger, senior technical manager at London-based John Charcol, said they had not encountered any problems securing mortgages for EU nationals.
Mr Boulger said: “I am not aware of any situations where we have had a problem along those lines.
“To prove affordability, [lenders] want borrowers to have a permanent right to reside in the UK.
“As EU nationals have a permanent right to reside in the UK, and the expectation after Brexit is EU nationals here are going to have that right, I don’t see lenders changing their policies on EU nationals due to Brexit.”
Mr Boulger pointed out that problems can sometimes arise when processing mortgages for EU nationals, as lenders have to do credit checks, and the systems used to carry out those checks vary from country to country.
As a result, lenders can have difficulty accessing EU nationals’ credit data – but this is a problem that existed long before the EU referendum.
A spokesperson for UK Finance said: “We do not have any evidence to suggest that firms are changing mortgage criteria, based on residency.
"Lending decisions are determined by a range of factors, mainly to do with affordability, creditworthiness and the suitability and valuation of the property, which may have nothing to do with residency status.
“Lenders are keen to pursue a ‘business as usual’ agenda throughout the forthcoming period of Brexit negotiations. The ongoing objective is to treat customers fairly, both now and in the future.”
simon.allin@ft.com
