Halifax has issued an apology for rejecting a mortgage application from a customer because the homeowner is harboring two Ukrainian refugees. Since June 2022, Dominik Zaum and his family have had a mother and her small daughter living in their annexe. When it was time to renew his mortgage, he submitted an application to Halifax. However, Dominik was denied because Halifax feared he might sublet out the space for profit in the future.
He said that they were very surprised by it as they have never rented it out and have no intention of renting it out in the future either. Dominik has what he calls a "granny flat" attached to his residence. It is a single room with a kitchenette and a tiny bathroom that can be accessed through its own door.
He is a member of the Homes for Ukraine programme, which began a little more than a year ago to assist in the resettlement of refugees who fled the country after Russia's invasion in February 2022. The majority of the 153,000 Ukrainian refugees who have arrived in the United Kingdom, according to research, have remained.
To assist with the cost of housing migrants, hosts receive £350 per month for the first twelve months and £500 per month thereafter. This year, Dominik's fixed-rate mortgage was coming up for renewal, so he decided to shop around for a new loan and that's when conflict and anxiety began. Halifax sent an appraiser to Dominik's residence.
He stated that they spoke directly with the appraiser when he inspected their home. However, Dominik stated that when they contacted Halifax through their broker, they informed them that they were unable to offer a mortgage because they were providing housing for a Ukrainian family. There was a substantial possibility that they would rent out the room for commercial purposes in the future."
When Halifax was contacted by Money Box they apologized for the confusion created and also offered Dominik a mortgage deal. However, Dominik claims that the only reason for Halifax to back down was because Money Box started to investigate.
Halifax apologized for the confusion and is very supportive of the 'Homes for Ukraine' scheme. They also mentioned that they wouldn't decline a mortgage application on this basis. After reviewing the application again they have issued an offer and the application will proceed as normal they mentioned.
Halifax stated that the valuer did not recognise the informal nature of the tenancy, which was reflected in their report, which stated the property was inappropriate for these lending purposes and assigned a zero valuation. Dominik expressed concern that the refusal by Halifax could have been replicated by the rest of the lending industry.
Fortunately, they have since secured a mortgage with another bank, so it has had no effect on their finances. He added that they have been unable to secure a new mortgage. They would have switched from a fixed-rate mortgage to one with a higher interest rate, which would have cost them over £9,000 annually. The government has advised individuals who are hosting refugees under the Homes for Ukraine programme to keep interested parties informed.