30% of self-employed borrowers have been rejected for a mortgage, compared to 14% in the general population, according to a survey commissioned by LendInvest.
The fintech mortgage lender surveyed 1,000 people across the UK, focusing primarily on the self-employed and those with multiple or complex income streams.
The findings revealed that while 30% of respondents had faced rejection, 35% agreed that there were not enough mortgage products available to suit their situation.
What’s more, 48% said they have been negatively impacted by the mortgage application process and 43% believed they were less likely to become a homeowner due to the cost-of-living crisis.
The research conducted on behalf of LendInvest by market research firm Opinium, highlights the extent of the problems presented by the standard mortgage process for an important and undervalued segment of workers across the UK with more complex income streams than salaried employees.
It also shows how the current range of mortgage products on offer from lenders is failing to meet the changing needs of prospective homeowners and buyers across the UK.
Esther Morley (pictured), managing director, residential mortgages at LendInvest said: “The research confirms our long-held belief that the traditional high street mortgage model is not fit for purpose for a large proportion of the UK population and is failing to keep pace with the increasingly complex needs of prospective homeowners.
“An increasing number of people across the UK have different income streams that do not conform with outdated legacy platforms and processes, leading all too often to dispiriting ‘Computer Says No’-style responses.
“Many are left navigating a needlessly complicated, intrusive and stressful process, resulting in hardworking people being denied the dream of owning their own home and suffering unnecessary mental anguish.”
LendInvest’s findings shine a light on the burden of the validation processes behind normal mortgages, and how that is amplified for self-employed workers compared to their salaried counterparts.
Of those who have experienced the process, 18% stated that providing suitable proof of income was difficult, rising to 22% for the self-employed.
28% of self-employed respondents said that getting a quick decision from a high-street lender proved difficult.
One fifth of respondents also noted that finding someone to understand their situation was hard, with 29% saying they have felt discriminated against by a high street mortgage lender or bank due to their employment status or income streams.
Rod Lockhart, chief executive officer of LendInvest, added: “These results shed more light on the difficulties facing those with more complex cases applying for a mortgage and the general sentiment regarding the mortgage process during what is a difficult time for potential homeowners.
“Our residential mortgage products are designed to address the evolving needs of aspiring UK homeowners.
“With proprietary technology that streamlines applications and makes even the most complex cases simpler and faster, our aim is to improve the overall mortgage experience.”
