Home lenders are failing self-employed people who want to buy a home and more needs to be done to make sure they can get a mortgage, according to a new report.
It is estimated that some 250,000 people in London are unable to move home because of their employment status making it hard to secure a mortgage to buy, says the research from the The Mortgage Lender Show.
It also found that more than 670,000 self-employed people in London feel discriminated against by mortgage lenders and 235,000 said that they would live in another property if they were paid the same as they are now but employed rather than self-employed.
They include sole traders, contractors, and people running a business with up to nine employees, and they believe that mortgage lenders have a responsibility to provide a better level of support to the self-employed.
Of those in London who have applied for a mortgage some 51% found it difficult to provide the information required by the lender to assess their application.
‘Self-employed people in London are being let down by lenders, 235,000 would like to move house but feel they can’t because they’re self-employed. That’s around 85,000 people living in rented accommodation and 150,000 who are effectively mortgage prisoners,’ said The Mortgage Lender deputy chief executive Peter Beaumont.
‘Self-employed people are creating employment opportunities and form the backbone of our economy at a time when many large employers are finding it difficult to sustain their business models and levels of employment. It’s important lenders recognise this reality and support entrepreneurs to live in the home they can afford,’ he pointed out.
‘People’s financial circumstances are constantly changing. It’s why we believe in real life lending, we understand that life doesn’t move in a straight line,’ he added.
He also pointed out that there has been a 53% rise in self-employment since 2000 and 60% of the growth in self-employment since 2008/2009 has been in high skilled, higher paying sectors.
