Self-employed borrowers account for one in five specialist mortgages
The highest demand for specialist mortgages comes from self-employed workers, according to Paragon.
It surveyed mortgage brokers about their specialist mortgage clients – those who fall outside of mainstream lending criteria on the high street.
And borrowers who work for themselves accounted for the largest chunk – 21% of all cases.
This mirrors the sharp rise in the number of self-employed in the UK, up 24% over the last 10 years from 3.9 million to almost 4.8 million in the final quarter of 2017, according to the Office for National Statistics.
After self-employed business, intermediaries identified interest only (15%), complex income (14%), high loan-to-value (14%) and lending into retirement (11%) as the next most popular types of specialist mortgage business.
In contrast, low income business made up just 7% of specialist mortgage applications in Q4 2017, with adverse credit business lower still at 6%.
John Heron, managing director of mortgages at Paragon said: “It seems clear from this latest research that complexity around employment and income are the most significant reasons that intermediaries review the options available from specialist residential lenders.
“Customers with these characteristics are more likely to benefit from the detailed individual approach to underwriting that lenders in this segment of the mortgage market can deliver. With employment patterns continuing to become increasingly diverse and complex, we may well see this area of the market expanding going forward.”