A survey of 500 UK-based African diaspora carried out by Afin Bank found that their visa status was the most common reason for a decline, as cited by 48% of respondents.
Mortgage barriers for the African diaspora
This was followed by 41% who said it was because of their nationality, and 30% who were rejected because they did not have enough of a credit history in the UK.
Some 28% of respondents said the lender did not accept their passport, while a further 28% said their proof of funds was not accepted.
Afin Bank said this resulted in borrowers from Africa living and working in the UK feeling reluctant to apply for a mortgage.
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The survey found that 28% were concerned about their visa status, 24% about their nationality, and a fifth were worried about their lack of credit history in the UK. Additionally, a quarter had been told by a bank that they had a current account with that they would not be considered for a mortgage.
Of those who did successfully apply for a mortgage, a quarter said the process was difficult.
Overall, 92% of the people Afin Bank polled said they felt African nationals were under-served by the UK’s mortgage and financial services sectors.
Afin Bank said there was a demand for mortgages from the African community in the UK, as its research showed 41% already had a mortgage and 38% had applied for one in the last 18 months. More than a third – 36% – were planning to apply for a mortgage in the next 18 months, while 31% were looking to remortgage.
Struggling to lay down roots
Alan Davison, chief commercial officer for Afin Bank, said the research reinforced the need for a lender that understood the needs of this under-served community. He 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 said its findings rang true 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.
Originating from Nigeria, Kalu 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 (AwR) in October last year and is backed by African reinsurer WAICA Re.
It plans to launch this year with residential and buy-to-let (BTL) mortgages for borrowers in the UK and those from certain overseas borrowers. It entered the market to cater to Africans and other foreign nationals living in the UK.
