When policy becomes the barrier: Why it's time to rethink foreign national lending – Phillips

Every so often, though, a piece of work challenges our assumptions. Our recent foreign national mortgage pilot did exactly that and ultimately changed our thinking.

Imagine two NHS doctors who have lived and worked in the UK for eight years on Health and Care Worker visas. They have established careers, a combined income of more than £150,000 and a 10% deposit. By any reasonable measure, they appear mortgage ready. Yet they may still find themselves with limited options, not because of affordability, but because lending policy does not always recognise their circumstances.

It is a scenario brokers increasingly recognise, and one that raises an important question – are we assessing the risks that matter most, or are traditional criteria struggling to keep pace with today’s workforce?

The UK labour market has evolved significantly, and mortgage lending is beginning to evolve alongside it. Census 2021 found that 10 million usual residents of England and Wales were born outside the UK, representing 16.8% of the population. Many are building careers, raising families and looking to put down roots through homeownership.

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Testing our assumptions

At West Brom Building Society, we did not begin this journey by assuming we already had the right proposition. In 2025, we ran a pilot to understand demand from foreign national customers and the barriers they faced when trying to access a mortgage.

While the pilot generated encouraging interest, it resulted in relatively few completed applications, but the demand was there. Our criteria at the time – including income thresholds, residency requirements and eligible visa types – were too restrictive for many of the customers brokers brought to us.

The most common reason applications did not progress was due to policy restrictions on loan to value (LTV) and income. Importantly, the issue was often not whether customers could afford the mortgage, but whether our policy could recognise their circumstances.

The pilot did not deliver the outcomes we had hoped for, but it gave us something equally valuable, and that was insight. It showed where our approach was too cautious, where demand was strongest and where the market had moved beyond our initial criteria.

Looking beyond traditional indicators

Responsible lending will always be about understanding risk. But there is a difference between assessing genuine lending risk and relying on broad rules that may not provide the clearest picture of financial resilience.

One of the clearest lessons involved joint applications. Two healthcare professionals may have secure employment, several years of UK residency and a strong combined income yet find that a lender cannot recognise the full strength of their household because of restrictions attached to one or both visa types.

The issue is not necessarily their ability to repay. It is whether policy allows that affordability to be recognised.

Our conversations with brokers reinforced this point. Advisers were seeing customers with stable employment, sustainable affordability and clear plans to remain in the UK, but whose options narrowed because policy did not reflect modern employment patterns, household structures or visa pathways.

This is not a niche customer group. Office for National Statistics (ONS) analysis of Census 2021 found that 43% of non-UK-born residents lived in owner-occupied accommodation. Although lower than for UK-born residents, it shows that homeownership is already part of the long-term story for millions who have built their lives here.

Turning insight into action

The value of the pilot was not that it confirmed our original thinking. It was that it challenged it.

Those lessons have shaped the new foreign national mortgage range we are bringing to market, with broader recognition of eligible visa types, and lending up to 90% LTV. This is not about lowering underwriting standards; it is about designing policy that better reflects the customers brokers see every day.

The proposition is not simply a new product range, it’s the outcome of listening to brokers, testing our assumptions and applying what the pilot taught us – including that responsible lending should become more precise.

When customers have stable employment, sustainable affordability and genuine long-term plans to build their lives in the UK, the question shouldn’t simply be what visa they hold, but whether we are measuring the right risks and providing appropriate routes into homeownership.

If we can answer the right questions and respond through policy, we can better serve this increasingly important customer group and help build a mortgage market that better reflects the workforce and communities of modern Britain.