Bank of China ‘cherry-picks’ in British mortgage market

China's third-biggest commercial lender is moving into the mainstream UK mortgage market.

But state-owned Bank of China says it will only lend to borrowers with good credit histories, "cherry-picking" the best customers as it expands beyond its traditional base in Britain's ethnic Chinese community.

With banks remaining reluctant to lend and even some of those with unblemished records struggling to get a loan, Bank of China believes it has spotted a gap in the market.

"Before the financial crisis, you didn't have a choice, you could't cherry-pick the good customers," said chief retail banking officer Xixu Sun. "Now you have that choice because there's a drought in terms of mortgage loans provided by banks.

The Beijing-based bank has received 1300 mortgage inquiries in the past fortnight, and already approved £20 million worth of loans for 60 customers.

Those looking to borrow are subjected to interviews in person to assess their willingness to repay these loans. There will be no 125% home loans, however: lending will be capped at 75% of the price of the house.