In recent times, many brokers are finding that securing a deal for their self employed clients has become far harder than it should be.
The tail wind of the pandemic and lack of state support for many during that period meant lenders did pause for breath. We are of course many months on now and yet it can still be difficult to place these cases.
The problem with this is that if a client has a case declined for a seemingly spurious reason, they will be less reticent to apply at all. Though of course, the client will understandably discuss their experience with colleagues, friends and family with the net effect of growing the impression that all lenders are distrusting of the self employed and reluctant to help.
This is not the case.
We are one of many lenders who have worked hard to support self employed borrowers. Complex income, multiple jobs and varying income are all features of today’s economy. Certain sectors are treated differently too.
There are over four million self employed people in the UK – a huge opportunity for brokers. And in a population that is getting older, it may come as no surprise that almost half of all self employed working people (48%) in the UK are aged 50 and over, according to ONS data analysed by the over-50s digital community, Rest Less.
They found the proportion of over 50s becoming self employed has grown year on year for the last decade, despite the Covid-19 pandemic. The proportion of workers under 50 has been in steady decline over the same period, falling from almost 60% in 2021, to 52% in 2022.
As we know, people’s circumstances invariably become more complex as they get older – not less.
That’s why our policy makes it easier for self employed clients with less than two years trading to apply for a mortgage with us, providing essential support to this growing part of the market. As unlike many other lenders, we will only request one year’s accounts, or an SA302 and corresponding Tax Year Overview form.
We have a bespoke range of products available to them and we will consider salary and dividends or share of net profit. Clearly being able to speak to one of our underwriters is absolutely key and each case is individually assessed.
As we see technology creep into the working environment at ever greater pace, we should expect to see this sector grow exponentially. Self employment is a fluid thing. It evolves by its very nature and there are a myriad of different types of self employed people in our economy that deserve our support.
Francesco Di Pietro is head of intermediary mortgages at Newcastle Building Society
