Mortgage market remains buoyant but not for all borrowers
The mortgage market has been pretty buoyant despite Brexit uncertainty.
Data from banking trade body UK Finance shows approvals for house purchase hit a decade-high in July and were up 3.2% in August.
It will be a while before these approvals translate into transactions as it can take a while for sales to be completed but this does suggest banks are lending and buyers and sellers are doing deals even if there are fears of a no deal Brexit or general election.
One cohort that isn’t benefiting though is the self-employed.
A poll by Kensington Mortgages of 2,500 self-employed workers found that two-thirds say they are finding it difficult to get a mortgage, with a fifth of those renting now believing they will never get on the property ladder.
More than one quarter (27%) are so frustrated by mortgage difficulties that they are now actively considering giving up self-employed status to find a steady job instead.
Respondents cited high house prices outstripping earnings and sporadic income as the main reasons they are getting rejected by mortgage lenders.
It can be harder for those who are self-employed to get a mortgage as they may not fit a bank’s tick-box category if they don’t have regular income.
But there are arguments that they can be a safer bet than first-time buyers.
Kensington Mortgages said self-employed mortgage borrowers tend to save more and borrow less than those just getting on the property ladder.
Its own application data showed the average self-employed mortgage customer in the UK took out a mortgage that was 28% less than the maximum possible sum that could be borrowed.
In contrast, the average first-time buyer borrowed 19% below the maximum possible sum that could have been loaned.
This is where a mortgage broker comes in.
They can help self-employed and any types of borrowers navigate the maze of lenders and can use their specialist knowledge and experience to know the types of provider and product that would be most suitable for particular borrowers.
