Millions of self-employed feel discriminated against by mortgage lenders and fear they would be refused a home loan if they applied.
That’s according to a survey of sole traders, contractors and those running a business with fewer than 10 employees, which has been conducted as part of a special report by The Mortgage Lender.
According to the Office for National Statistics there are currently 4.86 million self-employed people in the UK, which represents just over 15% of the working population.
There has been a huge rise in self-employment since 2000. The sector has grown by 53% and is dominated by people working in high-skilled higher paying sectors.
Yet, the investigation discovered 71% of the self-employed population felt discriminated against by the mortgage industry and a fifth thought they would be rejected because of their employment status.
Just over 20% had also considered changing their employment situation because of the uncertainty of securing a mortgage and the majority also believed mortgage lenders had a responsibility to provide better support to those working for themselves.
The research also found that nearly half of those who applied for a mortgage found it tricky to provide the information required by the lender to assess their application.
Wake up call
Now The Mortgage Lender, which provides mortgages via brokers and intermediaries, has called for the mortgage industry to wake up to the fact the world is changing and to acknowledge the growth in self-employment.
Indeed, it said the self-employed market had been one of the defining characteristics of the UK’s recovery from the financial crisis.
It compared lenders reluctance towards self-employed borrowers to its preference for approving loans to married couples, pointing out that at least half of them were statistically going to split up.
Peter Beaumont, the firm’s deputy chief executive, said: “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.”
He added: “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.”
