If you’re self-employed, it doesn’t matter if you’re a freelancer or an umbrella company contractor – it’s damned hard to secure a home loan right now.
However, there may finally be some good news on this front! Soon we may be able to kiss goodbye to the days following the credit crunch and economic downturn, which saw skittish banks eliminate the types of self-certification mortgages that carried too much risk for a bank that was just bailed out by the British taxpayer.
The thing is that there’s so many people working for themselves nowadays that the market needs to adapt, and that’s exactly what some industry experts say is poised to happen. One mortgage broker, Andrew Montlake of Coreco, says that with people shifting away from traditional permanent employment and instead finding work from umbrella firms or other sources, it’s slowly becoming the norm when it used to be the exception.
And let’s face it: there’s an increasing number of Brits that are working for themselves. Just look at what the Office for National Statistics has to say: there are 367,000 more contractors and freelancers than there were just four years ago.
The lion’s share of that growth has happened quite recently indeed, with official figures stating that the 2011-2012 financial year saw the biggest leap forward. While the average lender is slow on the uptake when it comes to changing policies and such, the self-employment movement in the UK has gained so much momentum that even the most dyed-in-the-wool banking executive can’t help but sit up and take notice.
And this is almost bound to happen, if you ask me. For what it’s worth, it’s already begun, considering how Halifax has decided to allow contract workers to access its standard mortgage range – though it’s only for contractors who can prove that they can pull down a minimum of £50 per diem or can gross £75,000 a year.
No, £75,000 per annum isn’t exactly a small chunk of change, and you’d have to be pretty successful as a contract worker to pull down that kind of dosh. Still, it’s a start, and I’m sure that the rest of the high street will follow in Halifax’s footsteps in order to remain competitive. Once that happens, it’s only a matter of time before banks start diversifying and adding mortgage products for less affluent contractors – and at that point, it will be much easier to finance the purchase of a new home!
