Self employed say pandemic and rising house prices mean they can’t buy

A bank’s latest study suggests that self employed people are increasingly pessimistic about the chance of them being able to get on the property ladder. 

The survey showed that one in five self employed renters say they are more motivated to buy due to the lockdown experience and one quarter are currently actively saving for a deposit.   

However, many now believe that conditions for buying as a self employed worker have worsened. 

Just over a quarter say saving up for a deposit is more of a challenge now due to the financial impact of the pandemic and one in five have delayed their home buying plans.  

Despite some 27 per cent of self employed renters now seeking to improve their credit to boost their home buying chances, 14 per cent say their credit score has been negatively impacted due to the pandemic. 

These increased challenges have meant over a third of self employed renters say they feel buying a home is unobtainable for them right now.  

Over half of those questioned think mortgage lenders do not do enough to support the self-employed - a situation made worse because only 14 per cent of self employed workers having consistent income month to month. 

The number one reason for a mortgage application rejection for the self employed was being self-employed, with a third citing this as the reason for a rejection. 

Jon Cooper, head of mortgage distribution at Aldermore Bank - which undertook the study - says:  “The UK is an entrepreneurial nation, and the growing self employed workforce is integral to our economy, so it is disappointing to see persistent barriers for them when seeking to secure a mortgage, which appears to have been exacerbated by the pandemic.   

“The self employed need not despair, however, as the growth of specialist lenders has opened up an increasing number of options that can provide pathways to home ownership. 

”Our research shows 52 per cent of the self employed workers in the UK have seasonal or extremely variable income streams month to month, which may not fit the tick-box approach of many high street lenders, but specialist lenders can dig into the detail to understand complicated income streams ensuring the self employed have opportunities to get on the housing ladder.”