Mortgage refused ‘for hosting Ukrainian refugees’

Halifax has apologised for rejecting a customer’s mortgage application because the home owner is hosting two Ukrainian refugees.

Dominik Zaum and his family have had a mother and her young daughter staying with them in an annexe since June 2022.

When his mortgage came up for renewal, he applied for one with Halifax.

But Dominik was refused after Halifax said there was a risk he could rent out the space for commercial gain in the future.

“We were very surprised by this because we’ve never rented it out, we’re not renting it out now… and we have no intention of renting it out in the future,” he said.

Dominik has what he describes as a small “granny” flat attached to his house. It is one self-contained room with a kitchenette and a small bathroom accessed by its own door.

He is part of the Homes for Ukraine scheme which started just over a year ago to help rehome refugees who fled the country following Russia’s invasion in February 2022.

So far, according to government figures 153,000 Ukrainian refugees have arrived in the UK and research suggests most of them have stayed.

To help with the expense of housing refugees, hosts are provided with £350 per month for the first 12 months and £500 for each month after that point.

Like millions of other fixed-rate mortgage holders in the UK, Dominik’s loan was coming up for renewal this year so he decided to look around for a new deal.

And that’s when the trouble – and worry – started.

Halifax sent someone to value Dominik’s home.

He said: “We spoke directly with the valuer before, when he came and looked at our house.”

But Dominik said “When we contacted the 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.”

Halifax has since apologised for “the confusion” after being contacted by Money Box and has offered Dominik a mortgage deal.

But Dominik claims the only reason Halifax backed down is because Money Box started to investigate. “We raised it twice with the Halifax through our mortgage broker and nothing changed,” he said.

“It is very unfortunate that it took Money Box to get a response.”

Halifax said it is “very sorry for the confusion” and is very supportive of the Homes for Ukraine scheme and that it wouldn’t decline a mortgage application on this basis.

“Having reviewed the application again, we’ve now issued an offer and the application will proceed as normal,” it said.

Halifax said the valuer did not appreciate the informal nature of the tenancy, and this was reflected in their report where they noted the property was unsuitable for these lending purposes and given a zero valuation.

Dominik said that he was worried that Halifax’s refusal could have been mirrored by the rest of the lending sector. “We did not know at the time if other banks might have reacted similarly,” he said.

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

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.”

The government has advised people who are hosting refugees through the Homes for Ukraine scheme to keep any interested parties informed.

Are you part of the Homes for Ukraine scheme and hosting a family, or know someone who is, have you had any problems like Dominik? Email us your stories to

You can hear more on this story on BBC Radio 4’s Money Box podcast available shortly after broadcast by clicking here.