"Every year, self-employed borrowers face an inconsistent, complicated and time consuming mortgage journey."
Almost three quarters (71%) of self-employed borrowers still believe it’s harder to get a mortgage due to their employment status, according to research from Trussle.
33% of self-employed borrowers surveyed found sourcing information relating to employment history, earnings and tax particularly challenging.
38% said they found the mortgage experience difficult to navigate due to poor guidance from lenders and a lack of clarity over what additional documents are needed.
Additionally, 55% of self-employed borrowers who felt overlooked or penalised due to be being pregnant believe they were treated different during their mortgage application process.
20% of this group felt a lender unreasonably asked for proof about when their maternity leave ends and a further 20% felt penalised for not giving an exact date for returning to full-time to work. In comparison, permanently employed mortgage applications simply have to verbally confirm to the lender that they’ll return to work on the same terms.
Furthermore, 18% of self-employed borrowers aged 25-34 say they are putting off having children to help their self-employed mortgage application.
Trussle is now calling for a collaborative effort from the industry and the Government to better support the self-employed. Suggestions include integrating Open Banking to help those with multiple income streams, becoming more flexible with tax reporting periods, and assessing self-employed mortgage applicants on their current, and not historic, income.
Ishaan Malhi, CEO and founder of Trussle, commented: “The self-employment sector is growing quickly, but the industry isn’t adapting fast enough. Every year, self-employed borrowers face an inconsistent, complicated and time consuming mortgage journey.
“I’ve experienced the hurdles that self-employed people face first-hand. Before I founded Trussle, I was itching to get on the property ladder. As a self-employed mortgage applicant, I was treated differently by lenders due to my employment status. I wasted hundreds of pounds between various brokers who eventually shut the door in my face. I ended up out of pocket, confused and without a mortgage.
“And I’m certainly not the only one whose experienced the outdated and inaccessible process. From unsuitable mortgage products, to additional costs and a complicated application process - the self-employed are being let down.
“It’s not good enough. Home ownership should be accessible for everyone. We’re calling on the industry and the Government to work more cohesively to make changes for the better.
“At Trussle, we’re on a mission to fight for fairer mortgages. We’re using our data to help design new products for underserved groups, like the self-employed. Our ambition is to make home ownership accessible for everyone and this is a big step in that direction.”
CEO of HomeOwners Alliance, Paula Higgins, commented: “The mortgage industry and government need to wake up to the world in 2019 and do more to support the self-employed into homeownership. Gone are the days for many where you have a job for life with one company. Many of the hurdles this group of people face are time-consuming, bureaucratic and unfair. The industry should treat all applicants fairly and deliver a top notch service to the self-employed sector which will continue to grow.”