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Self-employed ‘jumping through extra hoops’ to secure a mortgage

Nearly three quarters (71%) of the UK’s growing self-employed population believe their employment status makes it harder to get a mortgage, according to Trussle.

Currently, there are 4.85 million self-employed people in the UK, but the number is predicted to rise to 5.5 million by 2022, with the UK’s employed community due to outnumber the public-sector workforce.

The online mortgage broker used insight from lenders and 2,000 self-employed mortgage applications to analyse how the self-employed are treated by the mortgage industry.


Its ‘Mortgage Saver Review’ revealed that self-employed people typically have to jump through extra hoops to get onto the property ladder to prove they’re not a risk to mortgage lenders.

These may include:

  • Providing additional documents including SA302 Tax Year Overviews and two to three years’ worth of accounts.
  • Having their affordability assessed on the past two to three years of earnings, rather than their current income.
  • Needing to prove a stable work history with no gaps in employment over the last two to three years.

A third (33%) of self-employed borrowers found sourcing this information particularly challenging. As a result, many faced longer application and approval times and additional costs to source documentation needed for their mortgage.

What’s more, two fifths (38%) found the whole mortgage experience difficult to navigate due to poor guidance from lenders and a lack of clarify over what additional documents are needed.

The impact of motherhood

Trussle also found more than half (55%) of those self-employed borrowers who felt overlooked or penalised due to being pregnant believe they were treated different during their mortgage application process.

Some 20% of this group felt a lender unreasonably asked for proof about when their maternity leave ends. A further 20% felt penalised for not giving an exact date for returning to full-time to work.

In comparison, permanently employed mortgage applications have to verbally confirm to the lender that they’ll return to work on the same terms.

Additionally, a fifth (18%) of self-employed borrowers aged 25-34 are putting off having children to help their self-employed mortgage application.

A call for change

In light of the results, Trussle is calling for a collaborative effort from the industry and the government to better support the self-employed.

Suggestions include integrating Open Banking to help those with multiple income streams, becoming more flexible with tax reporting periods, and assessing self-employed mortgage applicants on their current – and not historic – income.

Trussle has also announced that it will design ‘innovative mortgage products’ to help underserved communities like the self-employed.

“Every year, self-employed borrowers face an inconsistent, complicated and time-consuming mortgage journey,” Ishaan Malhi, chief executive officer of Trussle, said.

“I’ve experienced the hurdles that self-employed people face first-hand. As a self-employed mortgage applicant, I was treated differently by lenders due to my employment status.”

He continued: “I’m certainly not the only one whose experienced the outdated and inaccessible process. From unsuitable mortgage products, to additional costs and a complicated application process – the self-employed are being let down.”

Paula Higgins, chief executive of the HomeOwners Alliance, added: “The mortgage industry and government need to wake up to the world in 2019 and do more to support the self-employed into homeownership.”

“Many of the hurdles this group of people face are time-consuming, bureaucratic and unfair. The industry should treat all applicants fairly and deliver a top-notch service to the self-employed sector which will continue to grow.”

To view the third edition of Trussle’s Mortgage Saver Review, click here.


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