38% of self employed worried they can't get a mortgage

Thursday 21 May 2015

New research shows that 38 per cent of self employed professionals who are thinking of taking out a mortgage are concerned they won't be able to.

The Association of Independent Professionals and the Self Employed (IPSE), which surveyed 1,176 independent professionals, found that they are concerned they can't get a mortgage because they work independently.

What's more, 63 per cent of respondents said that they think self employed professionals have to jump through more hoops than people who follow a traditional employment route do. Sixty-one per cent also say it's harder to give the financial information that is needed to apply for a mortgage in cases where people are new to working independently.

Additionally, 61 per cent said that mortgage advisers do not understand their financial position and 45 per cent believe that mortgage providers do not want their custom.

To deal with the issues that have been flagged up by respondents, and ensure more people who are self employed are able to get a mortgage, IPSE recommends that mortgage advisers should be given better advice about independent working. It is also calling on the government to launch a review into lending to independent professionals.

Chief executive of IPSE Chris Bryce said: “Getting a mortgage is a major concern for the self-employed, despite 4.5 million people choosing to work independently in the UK. The whole culture around mortgage lending to the self-employed needs to be changed to accommodate the modern way of working.

“It’s crucial that better advice is given to mortgage advisors to provide them with a better understanding of independent working to ensure the self-employed are treated fairly. A dedicated member of staff is another way to achieve this.”

Mr Bryce also added that the Conservative Party said in its business manifesto that it would review mortgages for the self employed. He said that IPSE is planning to work with the new government on this issue.

The Conservative Party's business manifesto said that it would ensure self employed people are given more assistance to obtain mortgages as well as other benefits such as access to maternity pay and help to build a pension.

Chief executive of Ipswich Building Society Paul Winter said that his company believes that people he described as 'mortgage misfits', including the self-employed, freelancers and contractors, should have an equal amount of choice and access to mortgages as any other potential borrower. He says that mainstream mortgage lenders do often overlook people like the self employed, even if they are credit-worthy borrowers, because of their unusual circumstances.


By Victoria McDonnell

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