Self-employed pose a ‘big opportunity’ for mortgage lenders

A survey of mortgage brokers revealed the majority thought the market for mortgages which serve borrowers who did not fit normal lending criteria would grow by at least £1 billion in the next 12 months.

The biggest opportunity in this market, a third of brokers agreed, was the growing number of self-employed workers who wanted to purchase a home.

Self-employed fear refusal

There has been a surge in the number of self-employed people in the UK since 2001, increasing from 3.3 million to 4.8 million in 2017, according to the Office for National Statistics. The self-employed now represent nearly 16% of the workforce.

In December a survey by The Mortgage Lender discovered that despite the sector growing by 53% and being dominated by people in highly-skilled and well-paying professions, the self-employed felt ‘discriminated against’ when it came to taking out a  mortgage. Indeed, many said they were put off homeownership through concerns they would be refused by lenders.

But the latest research, carried out by specialist lender Bluestone Mortgages, suggests the growing number of self-employed actually provided the big opportunity for the specialist lending market. Now lenders must look at ways to help meet the needs of this demographic.

Steve Seal, director of sales and marketing at Bluestone Mortgages said: “A growing number of borrowers do not fit traditional lending criteria and the opportunities here for brokers and specialist lenders are unique.

“Customer lifestyles and habits are changing, and the market needs to adapt to this. With the number of self-employed workers rising, it is vital that this is met with a market fully prepared to cater for this pool of borrowers.”

Finding a mortgage

Self-employed workers, who are considering taking out a mortgage, are advised to speak to a broker with access to as many lenders as possible.

Indeed, Kevin Roberts, director of Legal & General Mortgage Club, said it was an area where customers needed extra attention and guidance and brokers were ideally placed to help.

He added: “It’s great to see this sector of the market growing, ensuring mortgage solutions are available for many different types of customers and their changing circumstances – whether it be first-time, second steppers or last-time buyers.”