Mortgages for Britain's legion of self employed workers from doctors to taxi drivers
A number of people from various occupations have joined the ranks of the self employed recently. Whether you're a self employed construction worker, IT professional, carpenter, doctor, taxi driver, plumber or dentist and want to get a mortgage you're likely to face certain obstacles to borrowing - but the right lender can help.. As a specialist broker we will approach the best lender for your circumstances, whether it's on the high street or a specialist.
Although a self-employed borrower may be turned down by one high street bank another may be able to lend and even where that is not an option, more specialised lenders may be able to offer a solution.
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According to the Office of National Statistics in 2014, 4.6 million people were self-employed in their main job which equates to 15% of the total of those in work - the highest percentage at any point in the past forty years. In addition 356,000 employees had a second job in which they were self-employed.
More women are joining the ranks of the self-employed while the number of over-65s who work for themselves has more than doubled in the past five years to reach nearly half a million. The most common roles are working in construction and taxi driving, while recent years have also seen an increase in management consultants.
With the number of self-employed workers rising, so is the need for self-employed mortgages
The past decade has seen the mortgage landscape change dramatically for self-employed borrowers. Those working for themselves went from finding it fairly easy to get approved for a mortgage to close to impossible when the credit crunch took hold.
The good news is that we are finally seeing more and more lenders waking up to the fact that the number of self-employed workers is on the rise.
Typical examples of the types of borrower we can help connect to specialist lenders
Below are example scenarios where specialist lenders may be able to provide an option when high street lenders can't. They are not genuine case studies and do not reflect actual customers or applications made but are intended to demonstrate the profile of the types of individual we can assist.
Stuart and Kerry
Stuart Riley, 51, and his wife Kerry, 49, own their family home in Exeter outright having paid off their mortgage five years ago. The five bedroom property is worth £700,000.
They share their home with their two sons, both in their 20s, who both work in the successful family catering business. They wanted to build an extension to give their mature family more room. The extension would be partly funded by an inheritance and partly by a mortgage raised against the family home.
They wanted to borrow £50,000, and given the value of the property Jonathan didn't think that would be a problem. However, when he approached the high street lender he has banked with for many years on a personal and business lever, they refused to offer him the mortgage he wanted. He was rather taken aback, especially given that the bank was aware of how profitable the family business had been for many years.
Stuart placed an enquiry through this website and the broker was happy to take on his case, fully expecting it to be straightforward and confident that he would easily find another lender to provide the finance.
To the broker's surprise, two more high street banks rejected the application, even after the sum applied for was reduced to £40,000.
Like many self-employed people, Stuart does not pay himself a vast salary, but his business accounts clearly indicate how profitable his firm is. Fortunately, some specialist mortgage lenders can and do understand how the self-employed work and how to analyse their financial position. In this case, Stuart's adviser was able to secure the required funding at a competitive interest rate from a specialist lender and the family ended up with the extension they wanted.
Paul and Sarah
Paul Andrews, 36, owns his own human resources consultancy. Having decided to start a family with his partner Petra, a writer working on her first novel, they wanted to move from their two-bed flat in Clapham to a four-bed house in Tooting, South London.
Paul worked in human resources at a large bank for many years, but left in 2013 to set up his own company. He has rapidly built up a network of clients and is earning healthy profits. However, Paul did not have such a successful time finding a new mortgage.
He had a £250,000 mortgage on his flat which was worth £400,000. He wanted to borrow an extra £50,000 to move up to a bigger house costing £450,000.
Paul was aware that his self-employed status could present an obstacle, but thought that, given how well his business has been performing, he might be OK.
Paul first approached his bank, but they turned him down. He decided to consult a financial adviser who explained that a specialist mortgage lender would be more sympathetic to his situation as a recently self-employed borrower. The broker found Paul the mortgage he needed at one such specialist and he and Sarah are now expecting their first child in their new home.
Self employed occupations
A broad spectrum of occupations now have healthy numbers of self employed people, most of whom would benefit from the services of a broker when it comes to getting a mortgage.
Here is a snapshot of the number of self employed people working in particular occupations and professions - published by the Office of National Statistics 12th August 2015
Managers, directors and senior officials: 551,000
Artistic, literary and media occupations including actors, dancers, musicians and photographers: 186,000
Construction and building trades: 152,000
Carpenters and joiners: 135,000
Taxi and cab drivers: 124,000
Plumbers and heating engineers: 73,000
Painters and decorators: 73.000
Gardeners and landscape gardeners: 60,000
Sales and marketing professionals: 59,000
Barristers, judges, solicitors and other legal professionals: 52,000
Engineering professionals: 45,000
Architects, town planners and surveyors: 43,000
Hairdressers and barbers: 43,000
IT professionals 33,000
Medical practitioners: 32,000
Teaching and education professionals: 34,000
Management consultants and business analysts: 29,000
Chartered and certified accountants: 28,000
Van drivers: 26,000
Dental practitioners: 25,000
Book keepers and payroll managers: 24,000
Graphic designers: 19,000