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Self-employed workers struggle to secure mortgages

Self-employed workers are struggling to secure home loans despite a sharp rise in the number of mortgage deals available, as banks favour payslips over invoices, new research has revealed.

A survey by Nottingham Building Society found 12% of self-employed workers have been turned down for first-time mortgages or remortgages, underlining the problems of proving income and affordability for customers who are not full-time employees, because many are perceived not to be earning steady wages. 

The online poll of 1,065 adults revealed that 48% of the self-employed workers questioned earned about the same or more than in their previous job, but they are effectively being penalised by mortgage providers for running their own businesses.


The number of self-employed people in the UK has risen sharply in recent years following the financial crisis, but the fact that a significant share of these people are unable to secure home loans will inevitably add to growing demand for rented homes in the coming years.

A separate survey by comparethemarket.com, of over 2,200 adults who have never owned a home, found that 33% of people - the equivalent of more than 5.5 million British people - think that they will have no alternative but to rent for life.

Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, said: “Self-employment is growing rapidly and being your own boss should not mean you cannot successfully apply for a mortgage.”

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