Newly released data from Ipswich Building Society shows that self employed people in the UK feel shunned by the big high street lenders.
A new survey from Ipswich Building Society shows something we have heard many times at DumbFunded, that self employed people, freelancers and contractors feel they are unable to get a good mortgage deal from high street banks because of their employment status.
77% of people surveyed were worried about having a limited choice of mortgage providers, and 76% of people thought they would not be able to get a competitive mortgage rate.
38% of those surveyed were concerned they would have difficulty arranging a mortgage due to being self employed or a freelancer.
In our opinion the worst part is that this is a group of people who have been hailed as heroes, that create both jobs and wealth for the economy, yet end up suffering just because they are not in traditional full time employment.
Ipswich Building Society have tied the research up into an infographic you can view below:
So why are we in this position?
Before the credit crunch, it used to be common for potential borrowers to apply for ‘self cert’ mortgages.
It was possible to get a mortgage using ‘self certification’ whereby there was a requirement for little or no proof of earnings.
Add onto to this the 2014 Mortgage Market Review, which added additional restrictions to lending, ultimately making it harder for anyone with non-standard employment to get a mortgage.
How can self employed people and freelancers increase the chance of getting a good mortgage deal?
Having a good credit rating is of course always beneficial to any credit application.
In addition to this, what factors and tips can help a self employed person to get a mortgage?
- Get your accounts signed off by a qualified accountant and obtain a certificate confirming this – including as many years as possible
- Get SA302 receipts for the matching period as above from HMRC confirming earnings
- If approaching the end of the financial year, include predictions of year end position
- Include credible earning forecasts showing earnings should by steady or improve from their current positon
- Evidence of work history prior to self employment
You can find more information on mortgages on the Money Advice Service website here.
Main image adapted from a photo by Corey Templeton @ Flickr.