Lender predicts increase in self-employed lending

January 2, 2025 by Brendan O'Neill

Surveys and Statistics

One of the top specialist mortgage lenders in the country has released a new report in which it forecasts a big rise in loans for self-employed borrowers by the end of the decade.

The Residential Property Market Report was published by Together and it predicts a surge in self-employed lending between now and 2029. The lender is forecasting a rise of 67% in the number of loans given to borrowers in that situation. That would mean self-employed borrowing was worth £34.8 billion by the end of the decade. At the close of last year, it was worth £20.9 billion.

If this turns out to be true, it could represent a major turnaround for the mortgage industry. At the moment, it is more difficult for self-employed people to get a mortgage compared with those in conventional employment. This is down to factors like a lack of documents confirming income and fluctuations in income levels.

This is despite the fact that the number of people working on a self-employed basis is going up. It has risen by more than a million during the past twenty years, so there is a growing customer base for lenders that are willing to serve it.

John Barker from Together told Mortgage Introducer:

“During economic downturns, mainstream lenders tend to favour employed borrowers with perfect credit histories over self-employed individuals or those with past credit issues, even when the latter can provide larger deposits.”

Mortgage advisors with the CeMAP qualification will know that this prediction fits with others suggesting growing demand for specialist lending.