According to a study conducted by a specialist lender, contractors find it much more difficult to obtain a mortgage than employed staff.
The research by Kensington indicates that more than a third of contractors have had some difficulties when applying for a mortgage. According to Kensington, there is potentially a huge market for mortgages to contractors, with 1.23 million people either on part or full time contracts. The company argues that lenders should be addressing the problem and looking for ways to meet the rising demand.
The study shows that many contractors are now earning much more than when they were in employment, with 45 per cent having been in a job for over two years. Kensington polled 1,117 adults in June this year, and 17 per cent had been in contracting for more than 10 years. Despite these statistics, contractors still experience difficulty when applying for credit, with 33 per cent facing problems with an application for a mortgage, and 29 per cent finding it tough to secure a credit card or loan.
The head of Kensington’s sales and marketing, Sarah Green, said that work is now changing, with more people in contractor roles and for some, earning more than they would in regular employment. Now that the stricter regulations for applying for a mortgage have been introduced, more contractors may have difficulty.
Seeking advice from a CeMAP qualified financial adviser may help to find a lender willing to offer an affordable product to contractors, in addition to offering advice to potential homebuyers.