The ability to prove adequate trading history is the biggest barrier to the self-employed getting a mortgage, according to research by Kensington.
A survey of 619 mortgage intermediaries found that more than four in 10 (42 per cent) said the ability to prove adequate trading history is the biggest barrier to the self-employed in obtaining a homeloan.
Nearly a quarter (23 per cent) cited complex income structure as the main hurdle for their self-employed clients and 15 per cent said self-employed circumstances do not fit standard credit scoring systems.
Just over one in 10 (12 per cent) said that perception is a barrier for their self-employed clients, who do not think they will be able to get a mortgage and so do not even try.
Charles Morley, head of sales at Kensington, says: “It comes as no surprise that the main hurdles for the self-employed, when it comes to getting a mortgage are trading history, complex income and credit scoring.
“While many successful small businesses emerge from recession, it is not unusual for a high street lender to ask for three years’ trading history. And whereas the self-employed will often have a complex income structure from more than one source, automated decisioning systems take a more black and white stance on affordability.
“But Kensington takes an intelligent approach to lending, with criteria that is considerate of self-employed borrowers and experienced underwriters on hand to make pragmatic decisions. This means that all of our mortgages are available to self-employed customers with one year’s accounts and we can consider up to 100 per cent of all declarable income.”
