Cryptocurrency and mortgages

We have helped clients with deposits from Crypto in the past, however this was only for those clients that could prove the money went in from their own sources, with enough evidence for solicitors and the lender to be happy. However as the crypto market has dwindled this has become less and less popular, and unless it changes significantly I can't see it being a popular source of deposit this year.

Are cryptocurrencies actually still worth enough for a house deposit? In all seriousness, given the billions a year spent by banks and conveyancers on anti-fraud and money laundering measures, using something that is inherently hard to track the original source of funds for does cause issues. Whilst it's not impossible, just be prepared to have to compromise on which lenders you can work with and to provide A LOT of paperwork to show the money is legitimate,

All has gone a bit quiet on the Crypto front as the value has dropped over time but we do come across it from time to time. A lot of crypto investors seem to be holding onto their portfolio in the hopes it increases again so are using other funds for deposit monies and some have extreme gains so are selling slowly utilising their capital gains nil rate allowance.

In terms of bank attitudes they haven't changed much on the subject and very few lenders can accept them as a source of deposit. Nationwide used to have in their criteria they would accept but they changed that last year. When crypto is being used there is A LOT of paperwork with solicitors to track back the source of the funds and funds over time.

No. No. No. I can't see any benefits of using funds from this source. Extremely high risk and significant compliance issues for the adviser, solicitor and lender. It will be a path of pain, delay and frustration. If this is the source of a deposit my advice would be to turn it into cash as far in advance as possible and have solid, complete evidence of the providence of the initial investment, growth and sale.

To date I've not had anyone come to me looking to use a crypto account as their source of deposit and, off the top of my head, I can't think of any lenders saying they are happy to use this. If they did, I would imagine that, in the same way that a lender would want any other investment being used, they'd want it liquidated and seen as GBP and so available - just seeing it sitting in a crypto wallet would not be sufficient given the volatility of most digital currency. Proving the original source of that money could be the difficult part for many customers, as evidence of how the funds were originally generated could be problematic with crypto being unregulated and inherently difficult to trace.

We have had one instance of crypto being used as a deposit, the lenders were not keen and the solicitors were not willing to sign off the proof of deposit under money laundering. The reasoning was due to not knowing how it was invested and what it was used for. The client ended up having to get a gifted deposit from his parents to buy the property.

You might as well try using a bag of washed bank notes as try to use Crypto as a deposit!
Cryptocurrency is disliked by large sections of the traditional financial industry for a number of reasons but one of the key issues when it comes to property purchases is transparency for the source of wealth check. You need to evidence where the money has come from and with Crypto that can be very challenging. It is often far easier for professional gamblers to use gambling winnings for finance than Crypto.