"This is a testament to their resilience, and as lenders, we must recognise this ambition and ensure we’re aligning our product offerings to match. "
- Sara Palmer, distribution director at The Mortgage Lender
Four-fifths (79%) of non-PAYE workers - such as freelancers, self-employed individuals, and gig economy workers - have homeownership plans for the future, according to the latest research from The Mortgage Lender (TML).
Within this group, a fifth (22%) have plans to buy their first home, whilst well over a tenth are aiming to become a landlord (14%) or plan to buy their second home (11%) and a further one in ten (9%) plan to either sell their property or downsize.
Of those with plans, a majority (73%) of non-traditional workers are optimistic about achieving their homeownership plans in the next five years, with almost a third (29%) saying they are ‘very optimistic’ and well over two-fifths (44%) saying they were ‘somewhat optimistic’. This positivity is especially pronounced in the younger generation, with 84% of 18-24 year olds being optimistic about their property plans in comparison to 78% of 25-34 year olds, and 70% of 35-44 year olds.
When asked for the reasons behind this optimism, a third (35%) revealed that it was because their earnings are set to increase and the same number said they are optimistic because they are already on the way to achieving their plans. Similarly, 33% said it was because they would have saved enough for their deposit in that period.
Economic stability was also a major factor in feeling optimistic about homeownership plans. 24% think interest rates will come down, 17% think inflation will continue to come down or stay low, 16% think the housing market is stable at the moment, and 12% are optimistic because of the Government's plans to build 1.5m new homes in the next five years.
However, this isn’t true for all non-traditional workers. A quarter (24%) revealed they were not optimistic about achieving their homeownership plans in the next five years, and of this group, over half (53%) say this is because the cost of living has meant they’ve needed to use their savings and income elsewhere.
In fact, affordability was a common denominator as to why this group didn’t feel optimistic. 36% shared that the property in the area they want to buy or rent in is too expensive and 33% have not yet built up their deposit. Economic factors also had an impact on optimism, with 20% thinking that tax increases will make it harder to achieve their goals, 15% saying that they don’t think interest rates will be low enough for them to afford a mortgage, and 10% claiming that stamp duty is too high.
Despite this, a fifth (22%) of non-PAYE workers reported feeling motivated in trying to achieve their property goals.
Sara Palmer, distribution director at The Mortgage Lender, commented: “Whilst the hurdles to homeownership can be especially high for non-traditional workers, it’s encouraging to see that so many members of this group are still keen to pursue their homeownership plans. This is a testament to their resilience, and as lenders, we must recognise this ambition and ensure we’re aligning our product offerings to match. At TML we’re keen to support non-PAYE workers through real-life lending, which means working closely with brokers and regularly reviewing our criteria to best help people achieve their property ownership goals.”
