It’s time to take a second look at the self-employed market

John Phillips

November 21, 2016

John Phillips is group operations director at Spicer Haart and Just Mortgages

It has recently been reported that Theresa May is launching a review of workers’ rights in a move to pave the way for the self-employed. This is clearly a positive step in the right direction considering there are 4.6 million self-employed people in the UK (ONS).

However, in terms of mortgages, research from Nottingham Building Society has revealed that 48% of self-employed Brits earned the same or more than in their previous employment. So why are they still being left out? Self-employment is growing rapidly and being your own boss shouldn’t mean you can’t successfully apply for a mortgage.

Therefore, to ensure the self-employed are adequately catered for on a much larger scale, lenders need to be more relaxed about this particular group of borrowers. For example, in the past, if an employed brick layer became self-employed it is possible that they wouldn’t get a mortgage, although they are essentially doing the same job. In contrast, an employed person could have three or four jobs in the space of a year and they would probably get a mortgage. This suggests that some lenders may require a slight change in mentality.

Although lenders are responding with new mortgage deals for self-employed customers, they are not filling the gap as they are not meeting demand and the choice of specialist lenders that offer these mortgages are limited. In fact, some lenders still get very nervous when they are approached by those who have less than two years’ of accounts. It is time that these lenders improved their choice of specialist self-employed products and loosened their criteria further.

As an industry, it is the responsibility of brokers and lenders to advertise that the self-employed can get a mortgage. Therefore, as well as lenders having the ability to lend, the key to ensuring that the self-employed are sufficiently catered for is to get expert advice and to explore the full range of options available, because there are solutions out there.

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