"In economically tough times, lending appetites for mortgage applications considered complex dwindle to almost nothing, which we would say is unfair when it comes to the nation’s self-employed wealth creators"
- Ryan Etchells - Together
The UK’s self-employed workforce is sitting on nearly £82bn of disposable income – but despite their growing wealth, the vast majority struggle to get a mortgage.
They face being locked out of the mainstream mortgage market, despite accumulating a combined wealth nest egg of £81.5billion, currently enough to fund the average first-time buyer deposit 1.6million times over.
Many say being unable to prove a steady, monthly income has limited their chances of getting a home loan, according to a new analysis by specialist property lender Together, with 87% of workers surveyed agreeing it is “much harder” to get a home loan because they’re self-employed.
In addition, 83% of those who work for themselves say the mainstream’s current mortgage lending criteria are pitted against them and 87% are even prepared to take on extra work to prove their income on paper.
“The country’s self-employed workers are crying out for lenders to support their home-owning ambitions," explained Ryan Etchells, Chief Commercial Officer at Together, "In a lot of cases, despite holding an average deposit of £51,000 saved for a new home, self-employed customers still contend with major issues, financial prejudices and a lack of understanding of their incomes and finance needs from mainstream banks.
He added, “In economically tough times, lending appetites for mortgage applications considered complex dwindle to almost nothing, which we would say is unfair when it comes to the nation’s self-employed wealth creators.
“Specialist lenders can offer bespoke underwriting to get to know the borrower’s individual circumstances. It would be fantastic to see other lenders following suit, providing the same level of support for this large but underserved section of the UK’s workforce.”
Together’s latest research shows that the self-employed market now stands at 4.4m and income levels for the sector have grown by 7% since Covid and 26% in the last 10 years.
Meanwhile, a separate analysis predicts lending to self-employed mortgage applicants is set to rise by 67% over the next five years - from £20.9bn in 2023 to £34.8bn by 2029.
The UK regions have already seen considerable growth in wealth created by self-employed workers. However, their growing bank balances do not necessarily mean they can invest in bricks and mortar.
Top 5 self-employed property hotspots by Region:
| Region | Disposable Income | 5 Year Growth | 10 Year Growth |
| UK | £82bn | 7.0% | 26% |
| London | £20.9bn | 11.1% | 32.8% |
| South East | £12.8bn | 0.0% | 14.2% |
| South West | £8.0bn | 15.2% | 29.6% |
| East of England | £7.7bn | 0.9% | 28.4% |
| North West | £5.7bn | -7.3% | 7.9% |
The largest sums of income generated by the self-employed at a city level show considerable wealth which could be used to inject energy into the housing market to help alleviate the housing crisis.
| Cities | Disposable Income | 5 Year Growth | 10 Year Growth |
| Bristol | £802m | 23.4% | 37.4% |
| Birmingham | £747m | 2.3% | 59.7% |
| Manchester | £625m | 57.7% | 70.7% |
| Brighton & Hove | £337m | -29.2% | -15.1% |
| Coventry | £336m | 65.4% | 83.3% |
At an individual level, the research found that the self-employed have an average of £51,000 actively saved for new-home deposits. Almost one in five are looking to buy property in the next 12 months (19%), rising to over two in five looking to buy at some point in the future (45%), and over two-thirds of these (68%), will be looking for a mortgage.
However, the high rejection rates and other long-standing mortgage issues facing the self-employed mean that many do not see property ownership as a viable option. The survey reveals that four in five (83%) feel that mortgage lending criteria are stacked against them. The survey revealed that 82% have reconsidered their self-employment status altogether.
The study comes as the UK’s economic growth falls below expectations, and rising costs, in part brought by Chancellor Rachel Reeves’ tax-hiking Budget present another barrier as mainstream lenders default to double down on one-size-fits-all business models.
“Our data from Ignite, our broker technology platform, shows that six of the top eight income searches in the last 90 days were for self-employed applicants, reflecting the demand for this marketplace for home ownership and refinance options," said Greg Cunnington at Legal & General mortgage services, “The most searched option was for limited company directors. However, of these searches only 39% of lender responses for the client’s requirement were a yes, with another 11% refer, meaning a huge 50% of searches had a no response from lenders.
“This shows the opportunity that exists in this marketplace for lenders to really aim to support self-employed clients,” he concluded.
