New research from Nottingham Building Society has found that a significant number of young people in the UK are giving up on their entrepreneurial ambitions due to concerns that self-employment could make it harder to qualify for a mortgage.
More than half (58%) of 18-24 year olds and nearly half (48%) of 25-34 year olds dream of starting their own business but worry about how it could affect their ability to secure a mortgage.
The concern extends beyond entrepreneurship, with 59% of 18-24 year olds and 50% of 25-34 year olds wanting to turn their hobbies or passions into a career but fearing it would damage their chances of homeownership.
Half of 18-24 year olds admitted they have never seriously considered pursuing their passions as a career, believing it would make saving for a deposit or getting a mortgage too difficult.
As of November 2024, there were 4.4 million self-employed people in the UK, accounting for 13.1% of the workforce. However, with median net earnings for full-time self-employed workers 21% lower than those of full-time employees, the journey to homeownership is harder for those who are self-employed.
The findings highlight a growing challenge, as young people feel constrained by what they see as an outdated mortgage system that fails to accommodate modern employment trends. With the average age of a first-time buyer now 34, many aspiring homeowners feel they must choose between their career aspirations and financial stability.
More than a third of under-35s also believe they will need financial support from a friend or family member to secure a mortgage.
Praven Subbramoney, chief lending officer at Nottingham Building Society, said: “The choice between pursuing your passions and owning a home should not be one that anyone has to make. Young people are brimming with creativity and ambition, but our research reinforces what we’re hearing time and time again from brokers; that outdated lending models are holding too many young people back.
“When we support entrepreneurs in achieving their career and homeownership dreams, we’re not just helping individuals, we’re building stronger, more vibrant local economies. Small businesses and sole traders are often at the heart of our communities, and if they never have the chance to get off the ground, then society misses out. The solution is clear: lenders must evolve to meet the needs of a modern workforce and give young people the confidence to chase their dreams while planning for their future.”
