12 reasons why mortgage lenders say no

It typically takes around seven months to buy a home in the UK, according to the latest figures from Rightmove.

And any issues with your mortgage application can extend the time it takes. 

As the buying process is already long and arduous, it's important to avoid any unnecessary delays. That's why we've picked out the main property features that can raise red flags with lenders. We spoke to two brokers to get their views, including David Hollingworth from L&C and Nicholas Mendes from John Charcoal. 

Here, Which? also explains how to make yourself a more attractive borrower and what to do if you have a mortgage application rejected.

1. Getting a 'down valuation' 

When you apply for a mortgage, your lender will carry out a mortgage valuation (also known as a 'valuation survey') to check that the property is worth what you're planning to pay for it.

A 'down valuation' occurs when a mortgage lender believes the agreed purchase price of a property is higher than its actual market value. This can result in the provider refusing to lend the full amount requested, as it may not be able to recover the full mortgage value if the property has to be repossessed and sold.

If your mortgage is declined due to a down valuation, you can appeal the decision by providing evidence to support the property's value. This typically involves showing recent sale prices of comparable homes in the same area. Ideally, these should be similar in size, condition, and location, and have sold within the past six months.

• Find out more: mortgage valuations explained.

2. Leasehold issues

Two key factors to consider when looking at a leasehold property are the ground rent and the length of time left on the lease.

A mortgage provider will be very unlikely to lend on a property with a lease close to running out. Different lenders have their limits, but generally, they won’t lend on a property with less than 50 to 90 years remaining.

The exact limit can also depend on how much equity you have in the property. For example, Nationwide requires a minimum lease term of 55 years at the time of application. However, if you need a mortgage with a loan-to-value (LTV) ratio of 85% or more, the minimum lease term increases to 90 years. 

In addition, if a property has a ground rent clause that could lead to substantial increases over time – which could affect the property's resale potential – a lender may decline the mortgage application. 

For example, Leeds Building Society states that: 'Properties subject to an onerous lease clause regarding any excessive or unreasonably escalating ground rent are not acceptable.'

• Find out more: Should you wait for cheaper lease extensions?

3. Number of storeys 

Some providers, particularly smaller ones, have limits on the number of floors they will consider in a block of flats. Once a block exceeds a certain height, lenders may also require that the building has lift access. 

These rules are generally stricter for blocks of flats that used to be owned by the council. For example, Nationwide will not lend on former local authority flats in blocks of more than five storeys. However, other flats in buildings over five storeys with lift access may be accepted, depending on the valuer's assessment.

4. Spray foam insulation 

One issue that can catch buyers out is spray foam insulation in the loft. Some lenders may decline to lend on properties where it's present or require further checks.

This is because spray foam can make it harder for a surveyor to fully assess the condition of the roof timbers and identify problems such as damp or rot.

NatWest, for example, says properties with spray foam insulation can be considered, but are assessed on a case-by-case basis and subject to the valuer's comments.

Find out more: spray foam insulation explained.

5. Cladding 

Check whether there’s any ongoing issue with fire safety or external wall systems, and whether any remediation work is required. 

Lenders aim to be as flexible as possible, but they may need to factor in potential costs or see confirmation that any necessary remediation will be covered by a developer. Understanding the situation early on will help shape the conversation and clarify what paperwork is available.

• Find out more: Building Safety Act: what help will leaseholders get with cladding issues?

6. Flood risk

Lenders use mapping technology to identify homes that are vulnerable to flooding. If your home is determined to be in a high-risk flood area, a provider may refuse to offer a mortgage. 

To check the risk of flooding in your area, visit:

• Gov.uk if your property is in England
• sepa.org.uk if your property is in Scotland
• naturalresources.wales if your property is in Wales
• nidirect.go.uk if your property is in Northern Ireland.

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7. Above commercial premises 

Lenders may be cautious about properties located above commercial premises, particularly flats situated above takeaways. These homes often have a more limited market, which can make providers wary. 

For example, Nationwide will consider lending in such cases based on the valuer's assessment of factors such as noise, smells, anti-social opening hours, and fire risk, alongside local demand and the property's location.

It’s important to flag early on if a property is above commercial premises, as some lenders may show more flexibility depending on the specific circumstances. 

A mortgage broker with a good overview of the market might be able to help you navigate the lenders that would be more open to this type of property.

• Find out more: how to choose a mortgage broker.

8. Flying freehold

A flying freehold is where a section of a property extends over a neighbouring one. For example, a room that sits above a shared alley or passageway. 

Having a flying freehold doesn't automatically mean your mortgage application will be rejected. However, lenders often have specific criteria on how much of the property can be affected. Leeds Building Society, for example, will lend where the flying freehold accounts for 15% or less of the property.

NatWest, meanwhile, requires a written agreement in place to ensure the maintenance, repair and insurance of the building and common areas are shared fairly among residents.

• Find out more: leasehold vs freehold.

9. Unusual construction

Anything that isn’t standard in the construction of a property could create difficulties when applying for a mortgage. This is often due to known issues with certain construction types. For example, pre-cast concrete can deteriorate over time and may require significant remedial work. 

While it may still be possible to get a mortgage, it's important to raise any concerns early and check whether approved repair work has already been carried out. This will help guide expectations and identify which lenders might be more willing to consider the application.

• Find out more: house surveys.

10. Japanese knotweed

If this invasive plant is found within a property, it can put lenders off. For example, NatWest states: 'If the presence and extent of the knotweed seen offsite is considered to significantly affect the saleability of the subject property, then the property may not be considered to be suitable security.'

However, its presence is no longer an automatic decline on a mortgage application. While knotweed can cause damage to properties if left untreated, many lenders will now consider applications where an appropriate treatment plan is already underway. This work must be carried out by a recognised specialist and covered by an insurance-backed guarantee. 

• Find out more: could Japanese knotweed affect your home's value? 

11. Subsidence risk

If your property is in a former mining area, a lender may want further checks to assess the risk of subsidence before proceeding.

For example, NatWest lists geological issues, including the presence of gases and past or present coal and other mining operations, among the environmental factors a valuer may identify.

Its lending criteria state that properties will be assessed on their individual merits and that specialist reports may be requested before a decision is made.

• Find out more: how to check if your property is at risk of subsidence.

12. Your home is too small

This will only impact a very small group of borrowers, but some lenders do have minimum floor space requirements, which they won't lend below. For example, Skipton Building Society requires a minimum floor area of 30 square metres. 

If you're buying a particularly small studio flat, you may therefore have fewer mortgage options than you would with a larger property.

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Other reasons a provider won't lend to you

We’ve outlined some of the main reasons a mortgage lender might reject an application because of issues with the property itself. However, your personal circumstances or details in the application can also be deciding factors. 

Here are some common reasons a provider may reject an application based on your personal circumstances.

Current affordability: lenders will only approve your application if they’re confident you can meet the monthly repayments. It’s a good idea to cut back on discretionary spending in the months before applying. Cancelling unused subscriptions or memberships can also help improve your affordability profile.

Poor credit score: this is one of the most significant elements providers consider. Your credit score reflects your borrowing history, current debts, whether you're on the electoral roll, and even how long you’ve lived at your current address. If your score isn’t where it needs to be, take the time to build it up before reapplying.

Future affordability: providers don’t just look at whether you can afford repayments now, they’ll also stress-test your finances against possible rate increases. You can use tools like our mortgage calculator to see how even a small rise in rate will affect your monthly payments.

Recent job move: lenders often require applicants to have been with their current employer for at least six months, as this suggests income stability. If possible, delay changing jobs until after you’ve secured your mortgage, or wait until you’ve been in the new role for a little while before applying.

• Find out more: is it about to become easier to get a mortgage?

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What to do if your mortgage application is rejected

Having a mortgage application rejected is frustrating, especially after going through all the necessary paperwork. It's important to take the time to understand why your application was declined so that you can address any potential issues before moving forward.

Avoid the temptation to submit a new application straight away. If you haven’t identified and resolved the underlying problem, you risk being rejected again, which could further damage your credit score and make future applications more difficult.

It’s also worth checking your credit report for any issues that may have influenced the lender’s decision. You may need to take steps to improve your credit score before applying again.