One in five contractors fear being declined for mortgage
Contractors worry they will experience more obstacles than permanent employees when applying for a mortgage, according to research from Accord Mortgages.
The broker-only lender, which is part of the Yorkshire Building Society Group, said that one in five (22%) contractors and self-employed workers believe the way they earn their income has made it more difficult for them to get a mortgage compared to when they were in full-time employment.
Despite contractors and the self-employed totalling 22% of the UK workforce, almost a fifth of those questioned (19%) said they feel that dealing with financial institutions is more complex now due to their work status and 16% found the process of applying for a mortgage difficult.
David Robinson, national intermediary sales manager at Accord, said: “It’s obvious why contractors are concerned about getting a mortgage: they are applying for the same products as everyone else yet often they have to jump through more hoops to secure it.
“Although their income can be irregular, in some cases they actually have a higher earning potential than when they were a permanent employee, so it must be frustrating to know they can comfortably make their mortgage repayments yet some lenders still view them as a risk.
Luke Somerset, associate director at Niche Financial Group, added: “The myth that it’s a gamble to lend to contractors is slowly being debunked. Many lenders are working to understand more about contractors’ circumstances and they are adapting lending criteria to reflect this.”
Accord Mortgages is piloting a bespoke lending policy through selected brokers for contractors, taking greater consideration of the way they receive their income.