Brits Face Rejection of Mortgages for Gambling or Betting

Article by : Erik Gibbs Oct 22, 2024

• 
• 

Potential homebuyers in the UK are being urged to be cautious about gambling transactions on their bank statements, as mortgage lenders become increasingly wary of such spending. While lenders have always been cautious about approving mortgages, there is growing evidence that even minor gambling activity could be seen as a red flag during the application process.

Mortgage brokers have reported that banks are more frequently declining applications that feature gambling transactions. Joe Childes, a mortgage adviser at Right Choice Mortgages, recently told Sky News that several of his clients had their mortgage applications denied due to gambling-related spending, even if the transactions were minimal or sporadic. 

“We have seen cases declined where clients have separate accounts for placing bets, but even just those who bet on the football at the weekend,” Childes explained. He added that gambling transactions, regardless of their size or frequency, can trigger concerns among underwriters and lead to outright rejections. In some instances, decisions to deny applications have been made without providing applicants with grounds for appeal.

The heightened scrutiny appears to focus primarily on “habitual spending” on betting activities, which lenders consider particularly risky. However, even those with occasional gambling habits may face difficulties. Childes noted that applicants who engage in weekend betting on sports like football often see their applications rejected, despite demonstrating that their gambling habits are affordable and do not negatively impact their financial stability.

Mortgage applicants are generally evaluated on a wide range of factors, including income, age, credit utilization, and payment history. However, in recent cases, lenders appear to be emphasizing the impact of gambling-related spending when reviewing applications. Childes emphasized that this growing concern applies even to those whose betting activities are well within their means.

“For some clients, betting on football, for example, can be a hobby, and the amount spent is not excessive in relation to their income,” Childes said. “However, we have seen applications from these clients declined even where the clients are not under financial pressure and can maintain the level of spending.” This shift in lending practices suggests that even if an applicant can afford to gamble responsibly, it may still harm their chances of securing a mortgage.

In addition to rejecting applications due to gambling, some lenders have introduced a new layer of uncertainty regarding their evaluation process. Childes pointed out that there is no standardized “tolerance level” for gambling across lenders. Instead, each application is assessed on a case-by-case basis, leaving applicants in the dark about how much gambling might be considered excessive. 

“If the number of transactions seen through your account is considered to be excessive, this could lead to your mortgage application being declined,” Childes warned. He added that without clear guidance from lenders, potential homebuyers might inadvertently jeopardize their mortgage prospects simply by engaging in casual betting.

This development serves as a timely reminder for those hoping to secure a mortgage to review their financial habits carefully. While gambling transactions may seem like a minor detail, they could play a significant role in the final decision-making process. As lenders tighten their criteria, prospective borrowers should exercise caution and consider how even seemingly harmless betting activities could impact their mortgage approval.