UK Banks Do Not Want to Provide Mortgages for Bitcoin Investors
RegulationBit News Today2 min read
Several of the UK's largest banks have stated that they are unwilling to offer mortgages to individuals whose primary income comes from investing in Bitcoin and other cryptocurrencies.
Crypto investors, like all other groups of professionals, should be able to get access to mainstream financial services, but that's currently not happening. A recent survey of several UK banks found that a plurality of those interviewed reported that they would automatically dismiss any mortgage application from an individual whose primary income was from Bitcoin. ## What's the Problem?
Many UK banks have said that they do not consider crypto to be a stable source of income, or that it has insufficient regularity to be considered a dependable source of income for a mortgage loan. There are also concerns about the tax implications of mortgage payments paid in crypto, as well as the difficulty of managing repayments on volatile assets. The Auhority for Consumer Protection has stated that it will not intervene on the issue, and that it is in the hands of the banks.
"Many of our members have expressed concerns to us about the nascent and volatile nature of crypto assets, and the impact this could have on a borrower's ability to meet their mortgage commitments over the long term," said UK Finance, a banking trade body, in a statement. "We encourage lenders to take a considered and risk-sensitive approach, looking at each case on its merits."
However, there are those in the industry who say this is a discriminatory move. "If an individual has a stable income, they should be able to access mortgages just like everyone else," said a representative for the Digital Capitalist, an industry group representing crypto investors. "This is just another example of mainstream financial institutions shying away from the opportunities presented by crypto." ## What Happens Now?
So far, it is unclear how many investors have been affected by this policy change. However, as the crypto market continues to grow, it is clear that this is an issue that will need to be addressed at some point. In the meantime, Bitcoin investors who are looking to take out a mortgage may need to look to alternative lenders, or even hold off on buying a home until the situation changes.
But that doesn't mean crypto investors are out of options. Several lenders have started to offer mortgages to those whose income is derived from crypto, and the market is expected to grow as more individuals look to invest in crypto. It is also worth noting that there are a number of altcoins which have a more stable value than Bitcoin, which may be more appealing to lenders in the future.
The situation is still evolving, and it remains to be seen how the mainstream UK banks will respond in the long term. However, it is clear that there is a growing demand for financial services tailored to the needs of crypto investors, and that this is an area that will need to be addressed in the coming months and years.
