Can I Buy A House With Bitcoin Or Other Cryptos In The UK?

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So you’ve collected a pot of crypto that’s turned a healthy profit and now you want to use your coins in the real world.

And what better way to invest your new found wealth than in bricks and mortar!

But using your crypto and Bitcoin to buy a house in the UK is easier said than done.

There are also hurdles to overcome if you want to cash in your coins for fiat money and use it for a deposit.

Here, I explore the question of can you buy a house with Bitcoin in the UK and look at whether it’s possible to get a mortgage with crypto, or even use crypto proceeds to put towards a home.

Can I use crypto for a mortgage deposit?

It’s certainly possible to use Bitcoin and crypto profits for a mortgage deposit.

But you’ll need to jump through a fair few hoops to get the mortgage provider to accept your cash.

They’ll want to know in granular detail how the crypto was purchased, including the source of the funds (SoF) and source of wealth (SoW).

The distinction between the two is: SoF is the funds used for a specific transaction, whereas SoW means finding out where those initial funds have come from.

This is to comply with stringent Anti-Money Laundering laws that apply to all financial institutions in the UK.

They’ll also want a complete paper trail of your crypto purchases, including documentary evidence from the exchanges used.

This will usually require the services of a professional auditor who can verify your source of funds and all your transactions.

Which lenders are willing to accept crypto for a house deposit?

Yes. At the time of writing there were a select few UK lenders who were willing to accept the proceeds from crypto as a deposit when buying a home.

As I’ve said, you’ll need to have a complete, audited paper trail of your crypto transactions.

And you’ll also need to prove that you’ve paid all the relevant taxes and satisfied your obligations to HMRC during the application process.

You’ll need to do your own research when you come to purchase your house as the list of crypto-friendly lenders willing to work on these terms changes often.

It’s rumoured that being introduced to a lender by a trusted mortgage broker can increase your chances of successfully using crypto proceeds as a house deposit.

I haven’t had any personal experience of this so I can’t vouch for the veracity of this claim!

You may also like: Can I buy a car with crypto?

How do I cash in my crypto to buy a house?

There are many different ways to cash out your crypto in the UK and once you’ve got the money you’re free to do with it as you please, subject to the checks and AML rules I’ve already covered.

There are also two important things you need to remember before spending your crypto fortune:

• Pay all the taxes dues on your crypto profits, such as Capital Gains Tax (CGT), Income Tax and National Insurance.
• Ensure that you have a complete paper trail detailing all your crypto dealings, whether you’re a HODLer or a high-frequency trader.

The tax you pay will depend on what kind of crypto trader you are.

If you’ve bought some Bitcoin and held it for a couple of years before selling for a profit you’ll need to consider CGT.

You’ll only need to pay CGT if your profit exceeds your annual allowance (£12,300 at the time of writing), and there are ways of reducing the amount of Capital Gains Tax you have to pay.

If you’re a regular trader or miner, you’ll be liable to pay Income Tax and National Insurance.

Either way it’s important to pay the right tax to keep HMRC sweet.

If you’re unsure what to do you should consider using the services of a skilled crypto accountant to help you navigate the tax minefield and get your accounts ready for your mortgage lender.

You can read the full crypto tax rules here.

Can I use crypto to buy a house outright?

Some people want to avoid estate agents and conveyancing solicitors altogether.

This means you reduce the red tape involved in buy a house, together with reducing your costs by cutting out their fees altogether.

You also avoid some of the hassle and other costs associated with a home sale.

Selling a home directly to the market for crypto is something that can be done.

There have been several cases where people have sold houses for Bitcoin, including in areas of Berkshire and Essex.

So in theory you could buy a property directly from someone doing this.

You need to remember though that the options will be quite limited as not many people choose to sell their home this way.

But if you’re not fussy where you live you could scoop up a house outright with the crypto you hold in your wallet.

Of course you’ll still need to pay the taxes due, but you’ll save yourself a packet in fees buying this way.

Are there any estate agents that accept Bitcoin or other cryptos?

At the time of writing only a handful of estate agents were willing to take crypto as payment.

Included in these are:

• Essex-based Property Vine, which announced in 2021 that both vendors and landlords could pay with Bitcoin and other cryptocurrencies.
• London property developer The Collective also accepts Bitcoin deposit payments from its tenants in its Old Oak co-living scheme.
• In 2018, Agape Properties, based in London, announced that it would accept Bitcoin from clients.

It’s also rumoured that a leading UK property company is preparing to launch a portal that will accept crypto by way of payment.

Are there any crypto friendly mortgage lenders?

No. At present there aren’t any crypto friendly mortgage lenders in the UK. This could potentially change if crypto adoption broadens out.

Can I avoid red tape when using crypto for a mortgage or house deposit?

No. In the UK you’ll need to satisfy any lender that your crypto proceeds are fully traceable, including the source of the original money to buy it.

You can’t secure a mortgage or pay a home deposit without going through strict checks to comply with AML regulations.

So there’s no way of avoiding the red tape when it comes to securing a mortgage or house deposit with your crypto funds.