Research shows market still tougher for self-employed borrowers

October 28, 2024 by Brendan O'Neill

Property Market

The latest research into the mortgage market in the UK has found that things are still tougher for self-employed borrowers, with this group being the most likely to face rejected applications.

Aldermore carried out this research, and the findings make for stark reading for self-employed people. Those in that position who are trying to buy for the first time are twice as liable to face a rejection from a mortgage lender. The percentage of self-employed first-time buyers who are turned down for mortgages is 39%. By way of comparison, the average for the country as a whole is 20%.

Out of those who have been turned down, 19% told the Aldermore survey that their self-employed status was the reason for it. A further 40% indicated that they had abandoned self-employment so that they would have more security when it comes to repaying a mortgage.

This appears to paint a bleak picture of the mortgage prospects for self-employed people. Not all of the findings from the Aldermore survey were negative, though. Those in self-employment who have managed to buy a first home reported being delighted at their situations. 88% told Aldermore that they were thrilled to be out of the rental market.

Jon Cooper from Aldermore told Financial Reporter that:

“For those who are self-employed, contract workers or those with irregular income, getting a foot on to the property ladder often comes with more hurdles and setbacks, which can be disheartening.”

Mortgage advisors with CeMAP training can help steer such people towards specialist mortgage lenders.