Building societies have always supported the self-employed and the sector represents a continuing opportunity for them
It appears the 4.5 million-strong self-employed sector is crying out for attention. A recent survey by Aldermore found that 62 per cent of self-employed people did not know how they would manage to buy their first home, with many citing getting a mortgage as the biggest obstacle.
However, it is becoming easier for this part of the workforce to get on the housing ladder. Many challenger banks are realising it is an under-utilised market and mainstream lenders are pricing more aggressively to take a share.
Building societies have always supported the self-employed and the regional players often have a local insight into the economy and market the applicant works in. This means they can take a more educated view of a case, rather than one based on whether it fits their ‘standard’ policy.
There have also been reports of a growing number of building societies looking at a type of bridging offering that will provide one-year loans, intended to help break the housebuying chains that can bring so many potential purchases to a grinding halt.
While bridging may be very profitable, it is a specialist type of lending that most building societies would be unfamiliar with. That said, it is a legitimate product when it comes to assisting certain customers with completing house purchase chains.
It will be interesting to see how 2017 evolves for the self-employed and other lending areas. The self-employed sector is a continuing opportunity for building societies, through both traditional long-term mortgages and more innovative short-term loans.
In both cases, there will be opportunities for good-quality new business that the volume players do not want to take on.
Richard Pike is sales and marketing director of Phoebus Software