Can You Buy A House With Bitcoin? (2024)

Bitcoin is still the dominant cryptocurrency, with one bitcoin valued at 32767.412 British Pounds Sterling (BPS). And with its increase in popularity, more and more businesses are accepting it as a mode of payment.

The property market has also seen a drastic rise in the number of individuals wanting to buy a house using Bitcoin. Importantly, many try to use it as part of their deposit when completing a mortgage application.

So, can you buy a house with bitcoin?

The answer is yes, you can, provided you find sellers and mortgage lenders open to cryptocurrency transactions.

Read on to learn how to buy a property using Bitcoin, the benefits and drawbacks of considering this mode of transaction, and the potential future of Bitcoin in the property market.

How Can You Buy A House With Bitcoin?

Buying a house with Bitcoin is possible, and it’s already happening despite many estate agents and sellers being apprehensive about accepting it as a payment method due to a lack of uncertainty with lenders using it as a form of deposit as part of mortgage applications.

Moreover, many have already hit the market with the “Bitcoin accepted” tag. And this trend is expected to continue with the number of estate agents/mortgage lenders willing to accept bitcoin gradually increasing.

So, if you want to buy a home using this decentralised form of crypto, you have two options:

1. Buying A House Directly From The Seller

You may find a seller willing to accept a 100% bitcoin transaction where there is no need for a mortgage Or, they might ask for a split between money in the bank and crypto. Consequently, the crypto part of the transaction will occur between two wallets.

For sellers unwilling to accept Bitcoin due to its unpredictability, you will have to sell or exchange your Bitcoins through third-party sources beforehand to convert it to sterling; it may then be accepted. You may be able to fix an exchange rate for a specific amount of bitcoin/sterling with a broker.

Remember that even if you make a purchase using only bitcoins, cash payments will have to be made as fees to intermediary parties and government agencies will expect payment in sterling.

2. Opting For A Bitcoin-Friendly Mortgage

Pepper Money, Norton Home Loans, Generation Home, Barclays and Loughborough Building Society are a few crypto-friendly mortgage lenders in the UK. These financial institutes consider mortgage applications for those using bitcoins as their source of income or deposit. Although considered, every application will be assessed on its individual merits of course and there is never any guarantees.

Just remember that you can only use the cryptocurrency profits as a deposit once they are converted to sterling or fiat currency. This is a taxable event, so pay any Capital Gains Tax or Income Tax that may be due and seek advice from your tax advisor.

How Does A Bitcoin Transaction Work When Buying A House?

Using a third-party wallet provider, you can sell or exchange Bitcoins for real money. The third-party source will transfer the sterling into your bank account after the applicable fees have been paid and processes involved are completed.

Once the funds are reflected in your account, you will have to prove the source of the funds to the solicitor for the transaction to proceed. The solicitor will complete all the relevant anti-money laundering regulation checks for their own requirements and satisfy checks around the deposit for the lender. Here’s when complete cooperation and disclosure are needed, allowing detailed compliance checks to be made.

After all, the solicitor must trace the funds back to check how they have been converted. They will have to ensure the legitimacy of sourcing to satisfy the government’s anti-money laundering regulations.

In terms of verifying the true source of the funds, they may go back and vet transactions when the cryptocurrency was initially purchased as part of their anti-money laundering checks and verifying the source of funds for the mortgage lender.

We recommend full disclosure up front to all parties to keep everyone in the loop to give yourself the best chances of your property purchase going through successfully.

Why Shouldn’t You Buy A House With Bitcoin?

There are risks involved in any cryptocurrency transaction, which is why most mortgage lenders, banks, and estate agents are unwilling to accept Bitcoin payments. Here are the risks or disadvantages you should be aware of:

1. Bitcoin Is Highly Volatile

Bitcoin is volatile, making it very unpredictable. It can increase or decrease in value within just a few seconds, making it difficult to make a mortgage payment if you are using it for income purposes or agree on a selling price if you are using it as part of a deposit.

2. Lack Of Security

As mentioned earlier, Bitcoin or any type of cryptocurrency isn’t governed by a bank or financial institution. So, there’s a lack of security when it comes to these transactions.

It isn’t even protected by any UK regulatory protection scheme, meaning there’s no backup in case you get hacked or the valuation drops.

As such, estate agents and mortgage lenders don’t usually trust Bitcoins as legitimate money.

3. Availability of Bitcoin

Bitcoin was the first ever cryptocurrency created and introduced to the world in January 2009, valued at zero.

Only a few people invested in Bitcoin before its popularity rose. So, not many people today might be able to afford to purchase a house using just Bitcoin.

The Future Of Bitcoin In The Property Market

Bitcoin’s popularity and acceptance are on the rise. Many argue it’s only a matter of time before it becomes an accepted mode of payment for buying or renting a house.

We can also expect the launch of crypto-backed mortgages in the UK should its popularity continue to rise, which are already more readily available in the US. These mortgages allow you to use your Bitcoin or cryptocurrency as a deposit to buy a house.

A primary drawback of these mortgages is that you may not have enough collateral if the value of Bitcoin falls drastically, with such volatility being demonstrated in the past.

Frequently Asked Questions (FAQs)

1. What are the types of property you can buy using Bitcoin?

You can purchase any property using Bitcoin, whether your primary residence, vacation home, or commercial property. This will be dependent on the vendor and estate agent accepting it and any prospective mortgage lender that you look to use.

2. What cryptocurrency can I use to buy a house?

The two most popular forms of cryptocurrency widely used in transactions are Bitcoin and Ethereum. However over time you may be able to use fiat tokens, such as USDT or USDC, or other popular cryptocurrencies such as Solana, BNB, XRP, and Dodge to purchase properties.

3. Can you use Bitcoins to pay for your mortgage?

You can use the profits from your cryptocurrency investments to pay for your mortgage after converting them to sterling or as mentioned as part of your deposit.

4. Are there any crypto-friendly mortgage lenders?

Finding a lender that accepts bitcoin or cryptocurrency payments isn’t straightforward. But a few crypto-friendly mortgage lenders, like Barclays and Norton Home Loans, may accept your mortgage applications. However, as mentioned, this will be on a case-by-case basis.

This list is expected to increase as the popularity of cryptocurrency in the UK property market continues to grow.

The best way to find out more and get the most up-to-date information on using Bitcoin, Ethereum or other cryptocurrencies is to contact LendingLine today.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.