UK Bitcoin Investors Being Rejected by Mortgage Lenders

Given the massive spike in digital currency prices for the last couple of months, Bitcoin investors in the UK are now facing issues when it comes down to using their profits to purchase property.

Recent reports indicate that mortgage lenders throughout the country are wary of accepting to lend money out to bitcoin investors, due to being unsure of the money’s origin, but also because of money laundering fears.

UK law requires lenders to find the origin of all money being used in deposit schemes for property. Most of the times, this is done through the use of bank statements, or via signed monetary donation letters from parents or other third parties. On the other hand, digital currencies can only identify a user via an address, which for many lenders, isn’t good enough.

News on the subject first appeared after Mr Mark Stallard, who is a broker and principal over at the House and Holiday Home Mortgages in the UK, revealed that not long ago, a public sector worker wanted to deposit £40,000, yet his mortgage was refused due to him being unable to point brokers towards the source of the money.

This issue also pertains to the general lack of public education related to digital currencies, as there are still people who haven’t heard about them, thus leading to lenders being reluctant to provide cryptocurrency investors with mortgage possibilities.

According to the chief executive of the Association of Mortgage Intermediaries in the UK: 'The money-laundering aspect of cryptocurrency is the most complex issue here because it's hard to prove where the initial investment came from.'

However, sources in the industry have stated that it would be easier for customers to use bitcoin-based profits for mortgages if they waited for several months, prior to applying for a home mortgage. There are however a number of brokerages who are considering the idea of accepting bitcoin as a deposit source, although more legal research will need to be carried out.

Based on everything that has been outlined so far, it would be interesting to know if this is becoming an issue in any other countries. If so, digital currency investors would be left with fewer ways to capitalize on their profits.