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New report: Self-employed fear mortgage discrimination is rife

Posted Wednesday 28th of November 2018
BIG QUESTIONS DESERVE BIG ANSWERS

More than 3.5 million (71 per cent) self-employed people feel discriminated against by mortgage lenders and nearly a million (20 per cent) think they would be refused a mortgage if they applied for one simply because they are self-employed.

The shock findings are from research among people who are sole traders, contractors, or running a business with up to nine employees, and suggest widespread dissatisfaction with the way self-employed people are treated when they apply for a mortgage.

The figures, which are part of a special report – The self-employed economy; an opportunity for brokers and lenders – by The Mortgage Lender show 1 million (21 per cent) self-employed people had reconsidered their employment situation because of the uncertainty of securing a mortgage.

More than 4 million (63 per cent) believe mortgage lenders have a responsibility to provide a better level of support to self-employed, contract workers and business owners.

Of those who have applied for a mortgage 45 per cent found it difficult to provide the information required by the lender to assess their application.

And 26 per cent of self-employed homeowners say they would live in another property if they were treated the same as an employed person when applying for a mortgage.

There are 4.86 million self-employed individuals in the UK, accounting for 15.1 per cent of the working population, according to the Office for National Statistics.

The Mortgage Lender deputy chief executive Peter Beaumont said: “It’s time the mortgage industry woke up to the fact the world is changing. The growth in self-employment since the financial crash has been one of the defining characteristics of the UK’s recovery.

“For such a large segment of the homeowning population to feel they will be discriminated against when they apply for a mortgage is shocking and unfair. As a sector we’ve quite happily lent to married employed people when statistics show at least half of those couples are going to split up. “

“Self-employed people are creating employment opportunities and form the backbone of our economy at a time when many large employers are finding it difficult to sustain their business models and levels of employment. It’s important lenders recognise this reality and support entrepreneurs to live in the home they can afford.

“It’s something that we at The Mortgage Lender have recognised, people are moving from employed careers to self-employment or they get divorced and that is real life now – that’s why we’re the real life lender, we recognise life doesn’t move in a straight line,” said Beaumont.

The full report – The self-employed economy; an opportunity for brokers and lenders – also reveals a 53 per cent rise in self-employment since 2000 and that 60 per cent of the growth in self-employment since 2008/09 has been in high skilled, higher paying sectors.

Advertising, public administration and banking have seen the larges growth in self-employment while London, the South East and the South West boast the highest percentages of self-employed people.

To download the full report visit https://www.themortgagelender.com/self-employed-mortgage-market/

The Mortgage Lender caters for a wide range of borrowers including employed, self-employed, those with impaired credit, lending into retirement and buy to let investors.

About The Mortgage Lender’s Self Employed Economy Report: The research was carried out among 500 people who are sole traders, contractors or running a business with up to nine employees by One Poll between 10.10.17 and 25.10.17.

By Joanne Gill , of The Mortgage Lender

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