Mortgage woes for the self-employed: Trussle

A report by online mortgage broker Trussle has found almost three quarters (71 per cent) of self-employed borrowers believe it’s harder to get a mortgage due to their employment status.

The broker’s Mortgage Saver Review report says a fifth (18 per cent) of self-employed borrowers aged 25 to 34 are putting off having children to help their application.

According to the Office for National Statistics, there are about 4.85m self-employed people in the UK, with the number predicted to rise to 5.5m by 2022.

Trussle says self-employed people typically have to jump through extra hoops to get onto the property ladder to prove they’re not a risk to mortgage lenders. These may include providing additional documents including tax year overviews, and two or three years’ worth of accounts.

Self-employed applicants also have their affordability assessed on the past two or three years of earnings, rather than their current income.

A third (33 per cent) of self-employed borrowers found sourcing this information particularly challenging. As a result, many self-employed people face longer application and approval times and additional costs to source documentation needed for their mortgage.

The Mortgage Saver Review also found pregnant self-employed borrowers believe they were treated different during their mortgage application process. One-in-five (20 per cent) of this group felt a lender unreasonably asked for proof about when their maternity leave ends. A further 20 per cent felt penalised for not giving an exact date for returning to full-time to work.

In comparison, permanently employed mortgage applicants simply need to verbally confirm to the lender that they’ll return to work on the same terms.

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, not historic, income.

Trussle chief executive officer and founder Ishaan Malhi says: “The self-employment sector is growing quickly, but the industry isn’t adapting fast enough. Every year, self-employed borrowers face an inconsistent, complicated and time-consuming mortgage journey.

“I’ve experienced the hurdles that self-employed people face first-hand. Before I founded Trussle, I was itching to get on the property ladder. As a self-employed mortgage applicant, I was treated differently by lenders due to my employment status. I wasted hundreds of pounds between various brokers who eventually shut the door in my face. I ended up out of pocket, confused and without a mortgage.”

HomeOwners Alliance chief executive, Paula Higgins says: “The mortgage industry and government need to wake up to the world in 2019 and do more to support the self-employed into homeownership. Gone are the days for many where you have a job for life with one company. Many of the hurdles this group of people face are time-consuming, bureaucratic and unfair.”


Feature: Lending a hand to the self-employed

It is time to debunk the misconceptions surrounding borrowers’ mortgage chances, writes Leah Milner Mortgage options for the self-employed have improved in recent years, but despite positive changes in the market, brokers say it is still much harder than it should be to place credit-worthy cases. The vast range of different scenarios that a self-employed […]

Loughborough BS expands lending criteria for self-employed

Loughborough Building Society has expanded its range of mortgage options for contractors and the self-employed. This range now includes finance options for those who only have one-year’s full accounts. Loughborough says it will make “common sense decisions” in cases were those who are newly self-employed have worked in a similar role for a number of […]


TMA launches exclusive self-employed deal with Buckinghamshire

TMA Club has announced an exclusive two-year discount deal for self-employed borrowers with Buckinghamshire Building Society. The new product has been designed for borrowers who fit non-standard credit criteria and will be available exclusively to TMA Club intermediaries for the next six weeks, before a full market-wide launch in December. Available for both purchase and remortgage […]

Buy-To-Let Watch: Imagining life after Section 21

The government is considering abolishing the easiest mechanism for evicting tenants, so what are the implications for the BTL market? Landlords are used to the comfort of knowing that, supported by Section 21, as long as their tenants are outside of their initial fixed-term tenancy, they can serve notice. However, since the government has announced […]


News and expert analysis straight to your inbox

Sign up