There are many concerns in the current climates relating to job security – in particular how lenders look at the self-employed following lockdown with regards to consistency of their ongoing income.
The growth of self-employment, contracting and the gig economy has continued to challenge and change the make-up of the UK workforce over the past few years.
Government statistics for 2019 show the number of self-employed people increased to 4.93 million, some 125,000 more than a year earlier and this is a number which is only expected to grow.
Alternative income streams
As a specialist mortgage broker, we’re seeing a greater number of clients who are not only self-employed but who have a variety of income streams and different ways in which they generate their income.
As the raising of the Stamp Duty threshold is set to encourage more first-time buyers into the housing market, and homemovers to take the next step up the property ladder, it’s vital mortgage brokers are adept at meeting the ever-changing demands of such borrowers.
Moving forward, an even greater proportion of homebuyers will have a non-traditional income history and many differing forms of current income for lenders to contend with.
Despite this sustained shift, it largely remains the case that those with a salaried or traditional source of income are far more likely to be eligible for mainstream mortgage deals than those with complex income scenarios.
Having said that, there also remains a misconception those not eligible for the perceived favourable terms of high street lenders are unable to get a mortgage.
Access to specialist lenders
For there are a healthy number of lenders – some on the high street, many more not on the high street – who have competitive product ranges and flexible criteria in place which can service the needs of the self-employed workforce or those with multiple income streams.
A large proportion of these products are available through specialist lenders and some can only be accessed via a mortgage broker.
It’s always been slightly more complicated for self-employed people to obtain a mortgage and – especially over the short-term – this may get even tougher when you consider additional Covid-19 complications.
The rise of self-employment and the gig economy will undoubtedly continue. And with many underlying lending restrictions still in place, especially at higher loan-to-value levels, this really does magnify the importance of good, professional advice in helping self-employed clients and those with more complex incomes to achieve their homeownership goals.
Dale Jannels, managing director at Impact Specialist Finance
