Accord Mortgages is piloting a bespoke mortgage lending policy for contractors and freelancers.
The intermediary-only lender has reviewed its application process and has adapted its lending criteria to take into consideration the way contractors receive income less regularly compared to permanent employees.
It now allows a gap of up to eight weeks between contracts in a trading year.
Contractors can access Accord’s range of mortgages through selected specialist broker firms. Since May, Accord has been working with Contractor Financials to develop and road test its newest proposition to help this under-served market. Accord has begun a phased roll out of the pilot to five additional specialist broker firms with the view expand to the full broker market during 2017.
The new policy compliments the lending criteria Accord already has in place for self-employed workers.
Gerry Dobbin, corporate account manager at Accord, said: “The contractor and self-employed market accounts for 22% of the UK workforce, and it’s continuing to grow.
“From a lending perspective, the only thing that sets contractors apart from permanent employees is the way they generate their income. We felt that it was essential to create a level playing field for these workers and update our policy so they can easily access mortgages that are available to everyone else.
“We have worked closely with Contractor Financials to tailor a mortgage proposition for contractors, and we’ve developed a common-sense lending criteria and application process which takes into account their specific circumstances.
“For instance, rather than asking for reams of documentation to evidence their finances we will now only need an applicant’s current CV, their latest three payslips and business bank statements, plus three months’ worth of personal bank statements.
“We also want to make the contractor application process as easy as possible for intermediaries. We have a dedicated team of specialist underwriters who process contractor mortgages, which brokers can contact directly.
“By rolling out the pilot to the additional four specialist intermediary firms we hope to fine-tune our proposition before we offer it to the full broker market.”
Luke Somerset, business development director at Contractor Financials, added: “We’re delighted to have had the opportunity to work together with Accord to create a mortgage proposition exclusively designed with the needs of contractors at its heart. The assumption that it is risky to lend to contractors has begun to change, and it’s a positive step that another lender has committed to helping these workers with obtaining a home loan.
“It can sometimes be a complex process for contractors to get a mortgage, which has in the past resulted in many missing out securing a home. It’s important for lenders to understand the intricacies of this type of employment when making lending decisions. It is also a great opportunity for the intermediary market to pave the way for contractor clients.”
