"Many of these individuals could be great candidates for a lender, but all too often the complexities around the process for self-employed individuals is putting them off from even trying. "
- Sara Palmer, distribution director at The Mortgage Lender
Over one in five (22%) of non-traditional workers have never tried to get a mortgage due to fear of rejection, according to new research from The Mortgage Lender (TML).
TML surveyed 2,000 non-traditional workers, including self-employed workers, freelancers and gig economy workers.
25% said they never applied because they didn’t think they’d be approved for a mortgage. 18% of these respondents also never applied for a mortgage because they’d heard it was more challenging for those who were self-employed.
Lack of awareness of the mortgage process seems to be a roadblock for non-traditional workers as well, with one in ten saying they found the process too daunting and so never attempted to apply. Similarly, 10% said they didn’t know how to apply for a mortgage in the first place, while 8% didn’t know who to speak to about getting one. A further 8% said their business was under two years old and therefore wouldn’t have the right documentation to be approved.
There are also more traditional reasons why people may have not applied for a mortgage, including not having built up their deposit yet (36%). Others are waiting for interest rates to come down (14%) while 3% noted they had waited until after the general election to move forward with their plans. 4% needed some form of support, such as shared ownership.
To some, getting on the property ladder is not a priority. 15% of respondents prefer the flexibility of renting, while some aren’t ready for the responsibility that comes with owning a house (13%) or have been dissuaded from the process due to friends or colleagues having a bad experience with it (7%). 9% are also saving for other things first, and so have put off applying for a mortgage.
Sara Palmer, distribution director at The Mortgage Lender, commented: “We as an industry must deconstruct these ideas around the mortgage application process and make it more accessible to non-traditional and self-employed workers. Many of these individuals could be great candidates for a lender, but all too often the complexities around the process for self-employed individuals is putting them off from even trying.
“As a lender for real-life people, we are continuously revising and updating our services to provide the best possible support for our customers, which also includes giving non-PAYE workers the assurance that their career should not be a barrier to them reaching their property goals. These are individuals that are offering vital contributions to the UK economy, and its important that we, as a lender, can support them and offer them a smooth service comparable to more traditionally employed people.”
