01 November 2022

Self-employed client struggling to find a residential mortgage?

By Liza Campion, Head of Corporate Accounts, Kent Reliance for Intermediaries

There weren’t many areas of UK society that were unaffected by COVID-19, including the country’s job market.

One group of workers that was hit more than most by the pandemic were the millions of people who work for themselves.

After two decades of steady growth which saw the number of self-employed workers peak at more than five million at the end of 2019, a combination of less work and reduced income as a result of successive lockdowns saw more than 800,000 leaving the sector and returning to employed work, retiring or losing the business they’d worked so hard to build up1.

And while numbers have slowly started to creep up again over the past year2, a recent report by the London School of Economics has found that incomes and profits remain below pre-pandemic levels3.

The report goes on to say that the current cost of living crisis is exacerbating the challenges already faced by self-employed workers who’re still to fully recover from the pandemic shock.

One of those challenges is finding a residential mortgage in a market where lenders often view the self-employed with suspicion, often deeming their circumstances as being too complex or their income as too unpredictable.

The pandemic has only compounded the problem, with the stricter criteria many lenders imposed making it even more difficult for those who work for themselves to get the mortgage they need.

So where do you turn if you’re approached by a self-employed worker who’s struggling to find the mortgage they need on the high street?

 

How Kent Reliance for Intermediaries could help

As the home of handcrafted mortgage solutions, we know that every case is unique.

Our strength lies in our common-sense approach and the ability to see the potential in an application when other lenders may not be able to help. With a willingness to consider cases that fall outside of standard criteria and the ability to be flexible with our income multiples, we could provide solutions for even the most complex of scenarios.

We can support a wide range of client types, including self-employed workers. Whether they’re a sole trading electrician with years of experience under their belt or an entrepreneur in the early stages of establishing their business, we could help.

We accept self-employed applicants with a minimum of one year’s accounts and we can work on a projection for year two based on an uplift of up to 30% of the first year’s figures.

What’s more, thanks to our flexible manual underwriting, we can accept 100% of a second income that’s sustainable and held for a minimum of 12 months.

We also accept contractors with no minimum income, as long as their application can evidence at least one contract renewal, with a minimum of 12 months of sector experience. And as long as their contract has been renewed at least once and there’s at least six months to run, we can also accept clients on a PAYE contract basis too.

To find out more about how we could help, speak with your business development manager, call our broker liaison team on 01634 835791 or contact us via Live Chat.

Sources:

1&2https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/employeesandselfemployedbyindustryemp14/current

3 https://cep.lse.ac.uk/pubs/download/cepcovid-19-028.pdf

 

For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.