Self-employed fear mortgage discrimination is rife

28 Nov 2018 More than 3.5 million (71 per cent) self-employed people feel discriminated against by mortgage lenders and nearly a million (20 per cent) think they would be refused a mortgage if they applied for one simply because they are self-employed.

The shock findings are from research among people who are sole traders, contractors, or running a business with up to nine employees, and suggest widespread dissatisfaction with the way self-employed people are treated when they apply for a mortgage.

The figures, which are part of a special report – The self-employed economy; an opportunity for brokers and lenders – by The Mortgage Lender show 1 million (21 per cent) self-employed people had reconsidered their employment situation because of the uncertainty of securing a mortgage.

More than 4 million (63 per cent) believe mortgage lenders have a responsibility to provide a better level of support to self-employed, contract workers and business owners.

Of those who have applied for a mortgage 45 per cent found it difficult to provide the information required by the lender to assess their application.

And 26 per cent of self-employed homeowners say they would live in another property if they were treated the same as an employed person when applying for a mortgage.

There are 4.86 million self-employed individuals in the UK, accounting for 15.1 per cent of the working population, according to the Office for National Statistics.

The Mortgage Lender deputy chief executive Peter Beaumont said: “It’s time the mortgage industry woke up to the fact the world is changing. The growth in self-employment since the financial crash has been one of the defining characteristics of the UK’s recovery.

“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. As a sector we’ve quite happily lent to married employed people when statistics show at least half of those couples are going to split up. “

“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.

“It’s something that we at The Mortgage Lender have recognised, people are moving from employed careers to self-employment or they get divorced and that is real life now – that’s why we’re the real life lender, we recognise life doesn’t move in a straight line,” said Beaumont.

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