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Regulators and politicians should give self-employed the respect they deserve

Star letter

For the next few months we must expect every minor issue to be turned into a big production number by politicians in the campaigning stage of the general election.

One group of voters that could have the power to decide which party forms the next government comprises self-employed people with small firms. They number some 3.6 million and in 2008 collectively accounted for £1.1trillion in income.

Of course, this group includes many of the brave mortgage brokers who have endured and survived the most vicious economic slowdown since 1929.

Although many businesses have not made it through the storm many more have, and it’s a source of great embarrassment to me that many in this group are still unable to secure residential first charge mortgages.

Since the demise of self-cert last autumn nobody has been able to fill this void in the lending landscape, or maybe they have been unwilling to.

As a result, thousands of self-employed clients cannot exercise their right to social mobility because for years they have followed the culture of careful tax mitigation – one of the main reasons professionals decide to go it alone.

Under successive governments members of this group have been encouraged to help develop a free enterprise culture that rewards hard work with financial gain. I’m not talking about the few who deliberately defraud the taxman but the substantial majority who are happy to play their part as stakeholders in our society.

I don’t think it is too much of a generalisation to say that most of the businesses that have made it through from 2007 to 2010 must be of high quality. Economic booms allow an oversupply of almost everything whereas recessions cleanse the business ecosystem.

We all know that there is still great demand for mortgages and the quality of clients can easily be ascertained by some sensible risk profiling.

They could effectively demonstrate their affordability and prudence by highlighting the conduct of their personal and business bank accounts as well as their contracted credit.

And, of course, many are likely to have been owner-occupiers for at least a generation so they understand the importance of not overstretching themselves.

Remember, this group includes most independent mortgage brokers while I suspect many branch-based advisers couldn’t find their way around a balance sheet.

So I await the next stage of the Mortgage Market Review with bated breath and hope the Financial Services Authority will exercise some common sense when designing its policies as the present situation cannot be allowed to go on in a democratic society.

ROB JUPP
DIRECTOR
SAVILLS LENDING SOLUTIONS

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