Man has mortgage refused ‘for hosting Ukrainian refugees’

A family who has been hosting Ukrainian refugees in an annexe attached to his house were rejected for a mortgage renewal due to “a risk” it posed that the space could be rented out for commercial gain in the future, the BBC reported.

Dominik Zaum and his family, who opted into the Government’s Homes for Ukraine scheme when it launched last year, have been hosting two Ukrainian refugees, a mother and her daughter, since June 2022.

The Help for Ukraine scheme was launched last March to help house refugees who fled the country following Russia’s invasion in February 2022.

To help with housing expenses, eligible hosts receive £350 per month for the first 12 months and £500 for each month after that for a maximum duration of two years.

But when Mr Zaum’s mortgage came up for renewal this year, his application was rejected by Halifax due to having the family residing in his annexe space.

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He told the BBC: “We were very surprised by this because we’ve never rented it out, we’re not renting it out now… and we have no intention of renting it out in the future.”

Despite speaking directly with the valuer that Halifax sent before and when he came to assess the house, Mr Zaum said: “[Halifax] said they could not provide us with a mortgage because we were providing accommodation to a Ukrainian family and therefore there was a significant risk that we would rent out the room commercially in the future.”

Mr Zaum then raised the issue twice through his mortgage broker, but it was only when BBC’s Money Box got in contact that the firm issued an apology and a new mortgage deal.

Mr Zaum told the BBC: “It is very unfortunate that it took Money Box to get a response.”

According to Money Box, Halifax said it is “very sorry for the confusion” and is very supportive of the Homes for Ukraine scheme and that it wouldn’t decline a mortgage application on this basis.

It said: “Having reviewed the application again, we’ve now issued an offer and the application will proceed as normal.”

Halifax said the valuer did not appreciate the informal nature of the tenancy, and this was reflected in their report where they noted the property was unsuitable for these lending purposes and given a zero valuation.

Mr Zaum said: “We did not know at the time if other banks might have reacted similarly. We have since secured a mortgage with another bank so, fortunately, it has not had any impact on our finances.”

He added: “Had we not been able to secure a new mortgage we would have moved from a fixed-term mortgage to a higher rate and cost us over £9,000 a year.”