Pete Thomson is sales and marketing director at The Mortgage Lender
At one end of the wages scale in professional sport you have premiership footballers making millions in a matter of minutes and at the other, athletes reliant on survival through sponsorship.
Of course, the former don’t care that TSB has revoked its residential mortgage applications for sportspeople – hypothetically they could buy up a whole street without feeling much of a dent in their wallet – but what about the rest? Is this the first sign of how they plan to treat other self-employed borrowers?
I’m a Man City fan and I recently read a calculation by Matchedbets.com that Sergio Aguero only has to play one complete match to buy the average house in Manchester.
Although I don’t expect to hear from Aguero anytime soon with an application for a mortgage, since we launched over a year ago at The Mortgage Lender we have been approached about professional sportspeople who most would consider financially secure but who have struggled to have their mortgage needs met by the high street.
But, here’s the thing – professional sportspeople are essentially self-employed with complex incomes, and we know that sometimes, the high street isn’t too keen on those.
Mainstream lenders have regularly, but especially since the crash, made self-employed people jump through so many hoops, and over increasingly high hurdles for mortgages and even re-mortgages.
Professional sportspeople may have short-lived careers on the field, in the ring or on the pitch.
Ok, most won’t be lucky enough to go on to have careers in media as TV and radio pundits. But many can continue to earn good salaries long into retirement – albeit often on a freelance or self-employed basis.
And that’s the part that may concern the high street – the uncertainty of anything different to the 9 to 5, plain vanilla, employed and salaried borrower.
But self-employment and contract work isn’t for the few anymore. The way we choose to manage our money has changed, which is leading to fundamental shift in the market, particularly around the terminology used to describe lender propositions.
Perhaps the only sporting chance that borrowers with financial complexities have to secure funds will soon be found in the specialist market, if other high street lenders were to follow TSB.
We asked brokers if they believed specialist was becoming the new norm and half said yes. Over a quarter of those remaining (28%) said that it was ‘maybe’ becoming the norm.
TSB claimed that they didn’t want to ‘waste anyone’s time’ so took this step. Of course, it’s their decision to make but for me, to lend successfully in the current climate you need to be pragmatic, understand the profile of the borrower and the risk and take a common-sense view. And that means adapting to the world as it is now, with all of its uncertainties.
A one size mortgage for all obviously doesn’t work, but neither, in my view, does excluding borrowers who have complex, but none-the-less valid incomes.
The Mortgage Lender has completed cases for sportsmen and women and we’re more than happy to consider their home-owning ambitions just like any other self-employed borrower.