Self-employed Britons are still struggling to feel the benefits of recovery in the property market, according to Precise Mortgages’ Mortgage Voice report.
The specialist lender’s research found that only 5% of self-employed people believe that access to mortgages has improved significantly for all and 40% feel blighted by their choice to be self-employed. This is despite figures by the CML that indicate a positive market with gross mortgage lending reaching its highest level in six years during July 2014.
To tackle this issue, Precise Mortgages, has improved its lending criteria so self-employed individuals have greater access to its full range of residential and buy-to-let mortgage products. Residential mortgages start from 2.97% and rates for buy-to-let mortgages start from 2.93%. The lender said mortgage brokers are those best placed to provide extra detail on products available for self-employed consumers.
Generally, the self-employed need to supply a two or three-year track record for employment when applying for a mortgage. By contrast, those on PAYE contracts only have to provide one year’s evidence. To improve access for the self-employed to normal mortgage rates, Precise Mortgages has aligned both PAYE policy and self-employed policy so that both require just a one-year track record. The changes to the residential mortgage policy also allow self-employed people to borrow up to 85% of the value of the property, with no minimum trading period and just one year’s accounting information. Precise Mortgages has also developed a new policy especially for contract workers for applicants employed or self-employed on a fixed term contract basis.
Alan Cleary, managing director of Precise Mortgages, said: “We know first-hand that freelancers and self-employed people often struggle to gain support from mainstream lenders and are dismissed just because of their employment status. All sorts of professions can be freelance-based with a variety of income levels and plenty of the 4.6 million self-employed people in UK have a stable and secure income. Rejecting applications based purely on job status is wrong, each person should be assessed on an individual basis. Discrimination against the self-employed Brits must come to an end.
“At Precise Mortgages, self-employed people make up a large part of our business. In July for example, 30% of all residential mortgages and 60% of buy-to-let mortgages were advanced to self-employed people. As the numbers of self-employed Brits continues to rise, we expect more demand for products to suit their needs.
“As an industry, we must ensure we are catering for these people. That is why we’ve improved our offering. We firmly believe self- employed people deserve the same market leading products.”