40% of first-time buyers gave up being self-employed to ensure they could secure their mortgage repayments, according to new research from Aldermore.
First-time buyers who are self-employed are twice as likely to have been rejected for a mortgage by their bank, the figures show, at 39% compared with the national average of 20%.
Nearly one in five prospective buyers (19%) who have been rejected for a mortgage say they were declined due to being self-employed, having irregular income or being a contract worker.
However, despite the struggles, self-employed first-time buyers are happy to have made it onto the housing ladder, with 88% saying they are happy to no longer be spending money on rent.
Jon Cooper, director of mortgages at Aldermore, commented: “The homebuying process is difficult enough but even more so for those who don’t fit the standard profiles of some high street lenders. For those who are self-employed, contract workers or those with irregular income, getting a foot on to the property ladder often comes with more hurdles and setbacks, which can be disheartening.
“It’s concerning many first-time buyers are giving up being self-employed in order to get on the property ladder. Entrepreneurship is key to our economy, and we shouldn’t penalise borrowers on this basis. It’s a positive that over recent years, we’ve seen more lenders willing to be more flexible. At Aldermore, our human underwriting approach allows us to dig into the detail of a borrower’s finances to better understand their financial situation and help them realise their homebuying dreams.”
Contact one of our highly experienced mortgage advisors today on 0121 500 6316 to discuss your mortgage needs.
