Income Is Changing. Lending Needs to Catch Up

For years, ‘complex income’ was the label given to the small portion of borrowers whose earnings didn’t fit neatly into a single payslip - creatives, directors, landlords. Post-COVID, modern working patterns mean more people have multiple, complex income streams or non‑traditional employment structures - we’re seeing these cases far more regularly.

The stats don’t lie. According to ONS data, there are 4.4 million self‑employed people in the UK. Furthermore, more borrowers are juggling PAYE roles with second jobs or side hustles – with nearly 1.3 million people holding a second job.

At the same time, the gig economy has moved from a corner of the market to the mainstream. Around one in six UK adults now work a gig job at least once a week and almost half of gig workers also have a full‑time job. This means that lenders increasingly face affordability assessments built from several income sources.

This all paints a pretty clear picture: complex income isn’t niche anymore.

A growing opportunity for lenders

The rise of self‑employment and gig work is already reshaping mortgage demand and will continue to do so. Reports from specialist lenders indicate that lending to self‑employed borrowers is expected to grow significantly over the next few years. One projection suggests this part of the market could expand by around two‑thirds by 2029, driven by both demographic change and borrower behaviour.

Borrowers who were once seen as outliers - company directors paid via dividends, contractors, freelancers, or gig‑platform earners - now represent a substantial and growing share of potential mortgage customers. And while their income profiles may look different, they’re not necessarily higher risk. For many borrowers, multiple income streams indicate resilience rather than volatility.

• Broker insight reinforces this point. Many intermediaries are seeing:
• Borrowers with a PAYE role plus consultancy work
• Landlords combining rental income with employment
• Gig workers topping up core earnings
• Directors reinvesting profits rather than drawing them

All these scenarios require thoughtful assessment - but they are becoming increasingly common.

Why now is the time to adapt

The broader mortgage market has also shown signs of renewed activity. Recent FCA and MLAR data indicates strong growth in lending volumes through 2024 and 2025, with notable rebounds in gross advances. This backdrop creates space for innovation - including modernising income assessment processes to support a wider range of borrowers.

Lenders who can confidently handle non‑standard income will be positioned to capture a segment that others still serve cautiously.

What lenders can do to lead the market

1. Offer clarity, not complexity
   Brokers tell us the same thing time and again: lending criteria needs to be clear. Transparent rules on how you treat contractor day rates, director earnings, overtime patterns, and other complex income removes frictions and speeds up decision making.
2. Use real income evidence
   Annual accounts alone no longer tell the full story. Today’s borrowers often combine multiple roles, side income, or platform‑based work. Bank‑statement insights and year‑to‑date earning patterns give a far more reliable picture. By assessing affordability in actual cashflow behaviour, lenders can make faster, fairer, and more accurate decisions.
3. Underwrite for sustainability, not simplicity
   Rather than treating irregular income as a red flag, lenders can assess patterns: longevity, consistency, seasonality, and diversification. These indicators often reveal a stronger financial picture than a single PAYE salary ever could. Robust underwriting that rewards sustainable earnings, even if they’re non‑linear, can help lenders capture quality cases that others overlook.

A moment of opportunity

The profile of a borrower is changing. People are working differently, earning differently, and building careers across multiple roles, platforms, or business ventures. And the mortgage market needs to reflect that.

With millions of borrowers now earning outside the traditional model with no sign of slowing down, lenders who modernise their approach to complex income aren’t just supporting an underserved group. They’re tapping into one of the most important growth areas in the market.

That’s exactly why Vernon Building Society leans on personal underwriting, taking the time to understand real, modern earning patterns and give brokers direct access to decision‑makers, so those complex income cases get common‑sense decisions in a market that’s rapidly changing.

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