The Covid-19 pandemic has impacted the housing market in a major way and has only added pressure for banks to give out affordable mortgage loans.

Research by Mortgage Broker Tools found that 71% of self-employed cases processed through its platform in January 2021 were affordable, while 27% deemed it to be unaffordable.

It also found that the average maximum loan offered to self-employed mortgage applicants is £221,400 – a decrease of 3% from the last peak in August 2020.

Meanwhile, the minimum loan available to the self-employed recovered to £118,800, a 45% increase on its lowest point last April and a rise of 43% on November’s figures. 

During a survey, self-employed workers expressed how they felt about the mortgage application process, why they were rejected and what they would suggest should be improved.

Key insights from the survey include:

• 80% of self-employed Brits have been rejected when applying for a mortgage

• 36.6% of applicants have faced at least one rejected

• 32.8% were rejected because their credit rating wasn’t good enough 

When asked how individuals going through the mortgage process felt, they found that:

• 40% were stressed

• 28.4% were frustrated

• 26.4% felt hopeless

• 76.8% felt discriminated against when making a mortgage applicant for being self-employed 

• 70% of respondents have felt reluctant to apply for a mortgage due to being self-employed 

When asked how they can improve the mortgage application process:

• 46% believed that self-certification mortgages should be reintroduced

• 46.4% believe that removing the lenders requirements to have several years of certified accounts would significantly improve the application process

• 39.2% felt that a simpler process with less documents is required   

David Baird, mortgage and protections advisor at Aventur Wealth, comments: “Covid-19 has had a huge impact on self-employed mortgages as we have seen increased discrepancy in the market.”

“From one major lender (Santander) restricting all lending for S/E applicants to 60% (In January – now at 75%) to others carrying on as normal, it has caused more confusion for the average buyer.”