A rise in self-employed workers in the UK is driving demand for specialist residential mortgages, a report has revealed.
According to a survey of mortgage intermediaries, the self-employed made up 21% of customers for whom it was more difficult to find lending solutions.
Traditionally this area of the market had been dominated by people with credit problems. But they now only represent just 6% of specialist residential business.
Self-employment in general has risen sharply in the UK, increasing by 24% over the last ten years from 3.9 million to almost 4.8 million by the end of 2017, Office for National Statistics (ONS) figures indicated.
This steep rise is now being reflected in mortgage lending figures. Meanwhile, people with complex incomes represented 14% of potential borrowers in the specialist market.
John Heron, managing director of mortgages at Paragon, said: “It seems clear from this latest research that complexity around employment and income are the most significant reasons that intermediaries review the options available from specialist residential lenders.”
He added: “With employment patterns continuing to become increasingly diverse and complex, we may well see this area of the market expanding going forward.”
Other types of people who required specialist mortgages included borrowers searching for interest-only products. Mortgage brokers were also called upon to find specialist loans for people into their retirement – they formed 11% of their cases.
The number of clients looking to take out a high loan-to-value mortgage represented 14% of intermediaries’ cases, according to the survey which analysed data from the final three months of 2017.
