Almost one in eight self-employed workers has been rejected for a mortgage, despite earning more money, a report has revealed.
The report, conducted by the Nottingham Building Society (NBS), shows that 12 per cent of self-employed people have been turned down for a first-time mortgage or remortgage, 14 per cent have been rejected for credit cards, and 10 per cent for unsecured loans.
It also found that nearly half (48 per cent) of the self-employed participants earn “about the same” or “more than in their previous job”, and the “overwhelming majority” had previously been in full-time employment.
The NBS say that this study underlines the problems of proving income and affordability for customers who are not full-time employees, and less about actual earnings.
Earlier this year, a study conducted by the Financial Conduct Authority found that were was no evidence that mortgage companies were being prevented from lending to self-employed workers by new affordability rules, and revealed that the volume of loans had not fallen.
But some brokers believe that mortgage providers should do more to support the self-employed.
A recent survey found that 86 per cent of brokers say there should be more choice for the self-employed, with 23 per cent saying that they expect the volume of self-employed mortgage applications to rise this year.
According to official Government statistics, around 4.69 million people currently work for themselves – an increase of 182,000 in the three months to March.
Ian Gibbons, senior mortgage broking manager at NBS Mortgage Services, said: “Lenders are responding with new deals for self-employed customers being launched regularly so there are options available and demand. The key to ensuring that you do not struggle to be accepted is to get expert independent help and to explore the full range of options.”
