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The Struggles of Self-Employed Mortgage Borrowers
A recent study highlights the tough reality faced by the UK’s 4.4 million self-employed workers who are willing to make significant personal sacrifices to own a home. Research from Together, a specialist mortgage lender, reveals that many entrepreneurial individuals are putting crucial life milestones on hold—from wedding plans to family expansion—in an effort to fulfill their homeownership dreams.
Financial Sacrifices and Lifestyle Adjustments
The survey, which gathered insights from over 2,000 self-employed individuals, found that economic sacrifices extend beyond the balance sheet. Many are postponing critical life events; 15% have delayed starting a family, 12% have postponed marriage, and 19% have halted investments in their businesses to secure favorable mortgage deals. Additionally, social activities such as travel and dining out are often sacrificed, with 37% of respondents admitting they’ve shelved travel plans.
The Loan Approval Challenge
Despite holding a collective average annual disposable income of £82 billion, self-employed borrowers face considerable hurdles in the mortgage market. More than 40% of those whose mortgage applications were rejected cited their employment status as a critical factor. Compounding this issue is the complexity of proving income; nearly 18% detailed struggles in demonstrating their revenue from various income streams. A staggering 87% feel that their status as self-employed prevents them from accessing competitive mortgage options.
The Need for Market Change
Ryan Etchells, Chief Commercial Officer at Together, highlighted that the existing mortgage lending landscape is not only failing these borrowers but is also detrimental to the broader economy. He stated, “The inability for the self-employed to access the mortgages they’re looking for could be holding the wider economy back.” With a rising trend of older first-time buyers unable to move beyond starter homes due to stringent lending criteria, it’s clear that systemic changes are essential to support this essential segment of the workforce.
A Call for Action
The stark findings of this research should serve as a wake-up call for lenders to reconsider their approaches to self-employed borrowers. As a community of vibrant contributors to the economy, self-employed individuals should have greater access to mortgage products tailored to their specific needs. Encouraging lenders to innovate and expand their offerings can pave the way for a more inclusive housing market.
As potential homeowners, understanding these dynamics is crucial. Property owners and investors must recognize the value and challenges that self-employed borrowers face in the housing market. Staying informed empowers individuals to advocate for better lending practices today.
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