Mortgages: dissatisfaction among the self-employed
PUBLISHED: 14:53 21 March 2019 | UPDATED: 14:53 21 March 2019
Thousands of self-employed people in the South West are facing discrimination when they apply for a mortgage, according to research.
Research has revealed that nearly 300,000 (64 per cent) of self-employed people in the South West feel discriminated against by mortgage lenders and 119,000 (25 per cent) say they would live in another property if they were paid the same as they are now but employed rather than 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 144,000 (30 per cent) of self-employed people in the South West had reconsidered their employment situation because of the uncertainty of securing a mortgage.
More than 318,000 (68 per cent) believe mortgage lenders have a responsibility to provide a better level of support to self-employed, contract workers and business owners and 124,000 (27 per cent) think they would be refused a mortgage if they applied for one simply because they are self-employed.
Of those in the South West who have applied for a mortgage, 40 per cent found it difficult to provide the information required by the lender to assess their application.
There are 468,000 self-employed individuals in the South West, accounting for 17 per cent of the working population, according to the Office for National Statistics.
The Mortgage Lender deputy chief executive, Peter Beaumont, said: “Self-employed people in the South West are being let down by lenders, 119,000 would like to move house but feel they can’t because they’re self-employed. That’s around 43,000 people living in rented accommodation and 76,000 who are effectively mortgage prisoners.
“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 in the region 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 is 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’s financial circumstances are constantly changing. It’s why we believe in real life lending, we understand that life doesn’t move in a straight line.”
The full report (The self-employed economy; an opportunity for brokers and lenders) also reveals a 53 per cent rise in self-employment since 2000 and that 60 per cent of the growth in self-employment since 2008/09 has been in high skilled, higher paying sectors.