The growth of self-employment, contracting and the
gig economy has continued to challenge and change the make-up of the UK
workforce over the past few years. Government
statistics for 2019 saw the number of self-employed people rise to 4.93
million, some 125,000 more than a year earlier and this is a number which is
only expected to grow.
As a specialist mortgage broker, we’re seeing
a greater number of clients who are not only self-employed but who have a
variety of income streams and different ways in which they generate their
income. As the raising of the Stamp Duty threshold is set to encourage more
first-time buyers into the housing market, and homemovers to take the next step
up the property ladder, it’s vital that mortgage brokers are adept at meeting
the ever-changing demands of such borrowers.
Moving forward, an even greater proportion of
homebuyers will have a non-traditional income history and many differing forms
of current income for lenders to contend with. Despite this sustained shift, it
largely remains the case that those with a salaried or traditional source of
income are far more likely to be eligible for mainstream mortgage deals than
those with complex income scenarios. Having said that, there also remains a
misconception that those missing out on the perceived favourable terms of high
street lenders are unable to get a mortgage. Thankfully, there are a healthy
number of lenders - some on the high street, many more not on the high street -
who have competitive product ranges and flexible criteria in place which can
service the needs of the self-employed workforce or those with multiple income
streams. A large proportion of these products are available through specialist
lenders and some can only be accessed via a mortgage broker.
It’s always been slightly more complicated for
self-employed people to obtain a mortgage and – especially over the short-term
- this may get even tougher when you consider additional Covid-19
complications. The
rise of self-employment and the gig economy will undoubtedly continue. And with many underlying lending restrictions still in place,
especially at higher loan-to-value levels, this really does magnify the
importance of good, professional advice in helping self-employed clients
and those with more complex incomes to achieve their homeownership goals.