Mortgage refusals are a ‘real threat’ to self-employed people in the UK, the head of a specialist lender has warned.
Keith Street, head of Kensington, said it was “very clear” that the self-employed sector was the fastest growing part of the UK workforce.
Despite the growing numbers, securing a personal residential mortgage was a concern for 11 per cent of self-employed people nationally and up to a quarter in some areas of Britain.
Mr Street added: “The prospect of being refused a mortgage is a real threat and an understandable concern for them.”
His comments came as a poll by Kensington Mortgage Company revealed that a quarter of people who have spent at least 12 months working for themselves have been turned down for a home loan.
Ten per cent of self-employed workers said that they were totally unable to secure a mortgage, the survey revealed.
The online survey of 2073 adults by Kensington, taken between 11-15 September, showed that men (37 per cent) are more likely than women
(22 per cent) to be self-employed at some point in their lives, with those in Scotland, London and Eastern England being more likely to work for themselves.
A spokesman for the Council for Mortgage Lenders said: “Despite concerns that the new regulatory regime might make it more difficult for the self-employed to secure a mortgage, it is clear from the activity of a range of mortgage providers in the UK market that there continues to be a range of products available for this particular
sector.”
| Key Figures |
4.6m people are currently self-employed in the UK This makes up 15 per cent of the country’s workforce. Forecasts suggest that by 2054 the self-employed will make up almost a third of the UK’s workforce. Source: Kensington/Office for National Statistics |
Adviser view
David Hollingworth, associate director at Bath-based London and Country Mortgages, questioned the number of refusals: “I do not think because you have been self employed at any point in your working life that will have a bearing unless you have been in major difficulties.
“It can be hard for self-employed people, but the challenges are around proving income.”
He added the main problems stemmed from the recently self-employed: “Those people will not have built up three years accounts yet. If you have 12-months history that will not be advantageous.”
