"While a lot of lenders claim to serve the self-employed, our research shows that support is patchy and difficult, to the point that a majority would consider returning to a salary-paying role to make it easier to get a mortgage"
- James Briggs - Afin Bank
Three-quarters of self-employed people in the UK would consider leaving independent work in favour of a salaried role if it helped them qualify for a mortgage, according to research by Afin Bank.
The study found that 26% of self-employed workers believe they have been refused a home loan because of factors tied to their employment status, including fluctuating earnings and multiple income sources.
Afin Bank surveyed 500 self-employed people across the country and identified several key barriers to mortgage approval:
38% believe their self-employed status prevented them from buying a new home
23% said unpredictable or fluctuating income had stopped them getting a mortgage
13% cited insufficient proof of earnings or too few years of accounts
13% said an insufficient credit history was a barrier
9% felt their application was declined because lenders would not accept multiple income streams
Even among those who did secure a mortgage, 30% said the process was difficult before they were approved. More broadly, 86% of respondents felt that self-employed people are underserved when it comes to banking, mortgages, and financial services in the UK.
Afin Bank noted that these findings highlight a gap between lending practices and the realities of modern employment, which has evolved in part due to the impact of COVID.
“While a lot of lenders claim to serve the self-employed, our research shows that support is patchy and difficult, to the point that a majority would consider returning to a salary-paying role to make it easier to get a mortgage,” said James Briggs, intermediaries sales director at Afin Bank. “The definition of self-employment is evolving because of changes in working practices since COVID or because of uncertainty in the employment market. We have seen an increase in people on contracts, freelancing or with portfolio jobs, managing multiple income streams.
“We want to support as many self-employed people as possible, so we don’t use a tick box approach and instead work to understand their circumstances to provide them with suitable mortgages.”
