Lenders need greater understanding of complex cases

Posted on Thursday, December 7, 2023

Some 40% of self-employed individuals believe lenders must be more understanding when dealing with those with complex incomes.

This is according to research from The Mortgage Lender (TML) which also found that 38% of the self-employed think that having more specialist lenders in the market would make the mortgage application process easier for their cohort.

TML asked more than 1,000 self-employed individuals what would make the mortgage application process easier for them.

According to the survey, 34% said having to provide evidence of income for less time, so 1-2 years’ worth of accounts rather than two-three years, would make it easier, while 27% said a more streamlined approach to providing documents and evidence would help them.

And 30% said greater government support would make the mortgage application process easier, and 24% said bringing back ‘self-certification’ mortgages or a similar type of mortgage would help. There is clearly a need for more readily available information on the topic, with 20% stating this would be of help.

TML insists each of these asks are understandable when looking at what self-employed individuals find to be the most difficult parts of the mortgage application process.

Of those surveyed, 28% said understanding the process of a mortgage application was the most difficult part, while 25% said finding a lender that would lend to them was the most challenging. Another 18% said finding a broker that understood their circumstances was the trickiest.

Improving finances and getting all the necessary documentation in order also came up as a barrier for those self-employed.  While 23% said improving their credit score was the most difficult.

With concerns over affordability and the cost of living, nearly half (46%) raised saving for a deposit as being the most challenging part of obtaining a mortgage.

TML head of key accounts Chris Kirby comments: “Self-employed individuals have typically faced greater challenges when it comes to obtaining a mortgage compared to those who are employed.. But with 4.31million people who are self-employed in the UK  sitting in this group, it’s no wonder that they want to see more specialism and understanding in the market to support their property goals”.

Back to News Articles