Bank apologises after mortgage refused over Ukrainian refugees

The lender said there was a risk he could rent out the space for commercial gain in the future

An Ukrainian and Union flag flying above Spanish City in Whitley Bay, North Tyneside. Picture date: Friday May 6, 2022 (Owen Humphreys/PA) (PA Archive)

A bank has issued an apology after rejecting a homeowner’s mortgage application due to them hosting two Ukrainian refugees.

A mother and her young daughter have been staying in an annexe at Dominik Zaum’s family home since June 2022.

Fixed-rate mortgage deals leapt up in the wake of last autumn’s disastrous mini-budget, with many predicting they will continue to edge up even further as the Bank of England looks set to hike interest rates.

When his mortgage came up for renewal, Mr Zaum, like many others, begun shopping around for a new deal – and eventually applied for one with Halifax, he told BBC Radio 4’s Money Box programme.

But Halifax refused due to a risk he could rent out the space for commercial gain in the future, Mr Zaum told the broadcaster.

He said: “When we contacted Halifax through our broker they 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 was taking part in the Homes for Ukraine scheme, which allow Ukrainians and their immediate family members with no family ties to the UK to be sponsored by individuals or organisations who can offer them a home.

Halifax has since apologised for its refusal.

In a statement, a Halifax spokesperson said: “We are very supportive of the Homes for Ukraine scheme and would never decline a mortgage application on that basis.

“We reviewed the case, apologised to the customer that this hadn’t been made clear to us during the original application and issued a mortgage offer on 25 April.”

Mr Zaum said that he was worried that Halifax’s refusal could reflect similar behaviour by the rest of the lending sector.

“We have since secured a mortgage with another bank so, fortunately, it has not had any impact on our finances,” he told Money Box.

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.”