Kensington says UK business owners are in a surprisingly buoyant mood, with six out of 10 expressing confidence about their business prospects for the next six months. The most confident age group is those aged between 35 and 44. Of the self-employed people in this group, 40% claim to be “very confident” about the future direction of their business. But the 25 to 34 age group has the highest expectations for the growth of their business in the next 12 months, with 73% saying they expect turnover to increase.
Moreover, 32% of respondents do not expect to have to increase investment in marketing to maintain present levels of turnover, while a further 21% say they will probably not have to increase their marketing budget.
Despite high expectations for turnover growth, the self-employed have conservative expectations when it comes to growing their workforce, says the research. Only 6% say they are likely to recruit more staff over the next 12 months, while 53% say they are definitely not looking to recruit.
Opinion is also divided among small business owners as to whether they think they will be investing in their business over the next 12 months, with 26% saying they will be investing and 25% saying they will not.
When it comes to funding further investment, 48% of respondents say investment will come from personal savings. Almost a fifth (19%) say they are more likely to use a business loan, while just 1% say they will look to fund investment by remortgaging.
Kensington says the index, which surveyed 550 self-employed people, has been launched to track the mood, expectations and behaviour of the self-employed. It adds that it intends to carry out research on a quarterly basis. It says such information could prove useful to mortgage intermediaries looking to advise clients with their own business.
Kensington, which recently piloted a product that was 80% full status and 20% self-cert, is one of the only lenders to offer self-cert to borrowers one day after they set up in business.
Ian Giles, director of marketing at Kensington Mortgages, says: “With the number of people working for themselves growing all the time, the Kensington Mortgages Self-Employed Index can help put advisers in a very powerful position. This is just the first instalment of the index, but we expect it to become an integral part of every adviser’s business toolkit.
“It is a benign economic environment for the self-employed and this is reflected in the high confidence levels we have seen in the Index. But with uncertainty hanging over the future of the Bank of England base rate, business owners are understandably cautious when it comes to stretching their finances.”