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Self-employed make major life changes in a bid to get on property ladder

Some 38% pf self-employed people are forced to make significant personal sacrifices in order to buy a home, according to new research.

Some 13% have seriously considered abandoning their dream of home and 9% have reconsidered their self-employment status, the study from online mortgage broker Trussle has found.

Using insight from lenders and 2,002 self-employed mortgage applicants, the Mortgage Saver Review report reveals how challenging the journey to homeownership is for the UK’s 4.85 million self-employed workers.

Compared to permanently employed applicants, the self-employed need to go through extensive affordability assessments, provide further documentation and can face extra costs during the mortgage process.

It also found that 18% of self-employed borrowers aged between 25 and 34 have put-off having children to focus getting onto the housing ladder and overall 71% of self-employed people believe it is their employment status makes it more difficult to get a mortgage.

Meanwhile, some self-employed borrowers feel obliged to fundamentally change their day to day lifestyle. Some 8% take on extra work to prove their income on paper for lenders, 7% have been put off moving despite their existing property no longer being adequate and 4% felt the need to move back in with friends and family.

Trussle is 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.

‘Considering the average income for the self-employed is higher than those in permanent employment, there’s no reason why the journey to home ownership should be more difficult for those who are self-employed,’ said Ishaan Malhi, Trussle chief executive officer.

‘It’s concerning that many self-employed people feel pressured to make significant personal sacrifices to get on the property ladder. No one should feel they need to choose between having children and home ownership. Nor should anyone feel forced to change their employment status just to make the mortgage application smoother,’ Malhi added.