Aldermore offers self-employed a mortgage lifeline
Aldermore has announced that it will reduce the number of years accounts a self-employed borrower must provide when applying for a residential mortgage – from two years’ to one.
The lender will also take into consideration profit retained within the business when assessing affordability.
The changes come as the lender publishes a major study into self-employment, showing that more people are going it alone.
Doing it yourself
Just over one in seven, the equivalent of four million British workers, want to become self-employed at some point in the future, according to Aldermore, and more than one fifth (22%) say it has always been an ambition.
One in 10 workers (12%) are looking to make the transition in the next six months. For many (25%) though, the goal is further away and could take over five years to reach.
The most popular reason for wanting to become self-employed is the opportunity to earn more money (37%). This is particularly prevalent among those aged 25–34, of whom almost half (48%) cited this as a motivation. Being able to improve work-life balance (35%) is also a top reason.
Charles Haresnape, Aldermore’s group managing director, mortgages, says: “Taking the step to become self-employed is a brave and bold decision and we love the fact that in the UK more and more people are doing so.
“We want to make things easier for aspiring entrepreneurs by trying to ensure some security when it comes to home-buying. Almost a third (30%) of self-employed home owners believe the mortgage application process was biased against them, while almost two thirds (63%) of those who have experienced difficulty securing a mortgage said it was because it was difficult to find a provider who understands individual business owners.
“All too often self-employed borrowers do not fit the ‘norm’ for many lenders and it can be a real challenge for self-employed to receive the financial support they need to buy a home. This is why we are working to simplify the process of applying for a mortgage.”