A third of self-employed fail to apply for mortgages

Over the past five years, 36 per cent of self-employed individuals did not submit a mortgage or remortgage application because they expected to be rejected, according to Together.

The research outlines that 21 per cent of self-employed borrowers who do apply are rejected, with a fifth of them being turned down four or more times.

High street lenders cited a lack of recent tax returns; irregular or insufficient income; and the mortgage requested being too large as reasons for rejecting the self-employed, according to Together.

Furthermore, 65 per cent of self-employed workers have considered switching to a directly employed job to boost their application chances, the research shows.

The self-employed account for 15 per cent of the UK workforce, equating to 4.8m people.

Together personal finance chief executive Pete Ball says: “These findings are understandable, but the fact that so many people are doing themselves out of owning their own home because they expect rejection is very worrying.

“The way people live, and work has changed enormously over the past few years, and it does not make sense for the mortgage market effectively to lock out such a large group as the self-employed simply because of the way they earn a living.

“It therefore requires lenders to invest time and develop experience in understanding applicants’ circumstances in order to be able to help them.

“Providers have, quite rightly, to ensure that mortgages are affordable for borrowers, but that should not be done at the expense of making it harder for the self-employed. There are signs of improvement across the market, but greater flexibility is needed.”

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