Why British Buyers with Foreign Links Face Discrimination in Housing Market

The Increasing Discrimination Against British Buyers with International Links

A recent report by RSL LAW highlights a troubling trend whereby British homebuyers with overseas ties face significant discrimination in the UK property market. The claim echoes a growing concern about the stringent compliance measures that lenders and solicitors impose, often on an arbitrary basis. According to the chief executive of RSL LAW, Tatiana Sharposhnikova, many buyers, including families and professionals, are being denied mortgages because of their overseas sources of funds, which lenders associate with potential risks.

Understanding the Roots of Discrimination

This trend can be attributed to a combination of geopolitical and economic factors that have fostered a hostile climate towards immigration. With the increasing fears around anti-money laundering (AML) regulations and cross-border sanctions, banks are becoming overly cautious. Sharposhnikova notes, "Standard background checks by banks often trigger unwarranted alarms, leading to buyers from non-British backgrounds being classified as 'high-risk' clients. This labeling stems from their country of origin rather than actual financial risk."

The Threshold of Compliance Challenges

For many buyers, navigating the property market feels like overcoming a series of unintended barriers. The backlog of compliance hurdles not only delays transactions but, in many cases, halts them altogether. Buyers who should rightfully be able to purchase their homes are instead sidelined, losing out on their dream properties due to bureaucratic red tape. This not only hampers individual aspirations but also contributes to wider economic repercussions as these skilled workers contemplate leaving the UK altogether. Sharposhnikova emphasizes, "When we lose these individuals, we also lose their economic contributions to the nation."

Statistical Evidence Reflecting the Crisis

The implications of these practices can be seen in stark figures: the number of overseas buyers attempting to purchase property in the UK has reached a record low, falling from 1.2% in the previous year to even lower levels in 2025. Such a decline indicates that the market is becoming increasingly unwelcoming to foreign investment, threatening to yield negative economic impacts for the UK as a whole.

The Call for Reform: Bridging the Compliance Gap

In light of these pressing issues, RSL LAW is advocating for a reevaluation of how compliance regulations are applied to buyers with foreign links. The goal is not to eliminate necessary checks but to ensure that they are conducted fairly and with a full understanding of individual circumstances. Sharposhnikova states, "Reforming the system requires a commitment to holistic evaluations of buyers’ backgrounds, ensuring we apply the rules robustly, yet fairly."

A Broader Conversation on Property Accessibility

This situation prompts a crucial dialogue about property accessibility in a globalized environment. As international ties grow closer through technology and migration, property markets must adapt to not just accommodate but also welcome buyers from diverse backgrounds. The call to action is clear: understanding the needs of individuals in this broader context is paramount in maintaining a thriving property market.

For property owners and investors, this landscape raises vital questions. How can they ensure they remain compliant while also fostering a system that supports international buyers? Adjustments may be necessary to align policies with contemporary realities, advocating for fairer treatment and a commitment to inclusivity in real estate.

As the UK property market stands at this crossroads, it's essential for stakeholders to come together, reassess existing norms, and pave the way for a system that embraces all potential buyers.