More than 1.5 million homes across the UK could be refused a standard mortgage because they fall outside the lending criteria used by many high street banks, according to new research from specialist lender Together.

The lender estimates that around 6% of the UK’s 28 million residential properties are considered “unmortgageable” by mainstream lenders due to factors such as thatched roofs, short leases, solid-wall construction, high-rise locations, proximity to commercial premises or the absence of a functioning kitchen or bathroom.

For buyers, the issue can emerge late in the transaction, with mortgage applications rejected despite an offer having already been accepted.

However, Together says many purchasers continue to target these properties, attracted by lower prices and the potential to add value.

Among those who have bought, or seriously considered buying, a property that falls outside standard lending criteria, 44% said it offered better value than a conventional home. Around 31% were seeking a renovation project, while 28% viewed the property as an opportunity to increase its value before selling.

Investment potential also remains a key attraction. More than a quarter (28%) cited the lower purchase price as the biggest incentive, while 35% of buy-to-let investors said rental income potential was the main reason for pursuing these properties.

Securing finance remains the biggest obstacle. The research found 21% of buyers had already had a mortgage application rejected, while 32% said they were left with a much smaller choice of lenders willing to consider their application.

Together argues that greater access to specialist finance could help bring more of the UK’s existing housing stock back into use at a time when increasing housing supply remains a key political priority.

Ryan Etchells, chief commercial officer at Together, said: “One of the less visible challenges facing the UK property market is the sheer number of properties that mainstream lenders are reluctant to finance.

“That means a significant number of homes are effectively out of reach for ordinary buyers. While they don’t feature in official housing shortage figures, they represent part of the wider supply problem and highlight the scale of investment needed to bring more homes back into the ‘mortgageable’ market.”