We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

30 Jan 2019

Self-employed mortgage squeeze: can you still get a deal?

Specialist self-employed mortgage providers are pulling out of the market

A number of specialist mortgage providers have suspended lending amid 'challenging conditions', raising concerns that niche borrowers including the self-employed could find it harder to get a home loan.

It can be tough to get a mortgage when you're self-employed, as without regular payslips it's difficult to prove to lenders that you're a safe bet.

So, with options narrowing, is it still possible to get a mortgage when you're self-employed? We talk to David Blake from Which? Mortgage Advisers to find out.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

Lenders quitting the self-employed mortgage market

Secure Trust Bank announced earlier this month that it's consulting on stopping new mortgage lending until market conditions become 'more favourable'.

It pointed to increased competition in the market, with more and more lenders racing to offer lower rates, which has impacted its profit margins.

Secure Trust Bank normally offers deals to borrowers like the self-employed or contractors.

Meanwhile Fleet Mortgages, which also offers deals to self-employed borrowers, has pulled its entire range, citing issues around funding.

The firm said in a statement: 'We have recently completed £400m of mortgage loans with one of the world's largest asset managers.

'Due to the launch of our new products in December, this tranche of funding was filled much quicker than we initially anticipated.

'We have therefore had to pull the current product range while we wait for the next funding line to be made available.'

Can you still get a mortgage when you're self-employed?

So, with two specialist lenders withdrawing from the market, how easy will it be for self-employed borrowers to get a mortgage?

According to David Blake, a senior mortgage adviser atWhich? Mortgage Advisers, you shouldn't be put off applying for a deal.

He told Which? Money: 'The statistics show more people are now self-employed than ever before. Naturally, as this is a growing market, mortgage lenders have become much more flexible when it comes to lending to people with this type of income.'

The number of self-employed workers increased from 3.3 million in 2001 to 4.8 million in 2017 according to the Office for National Statistics - meaning self-employed people now make up 15% of the working population.

David explains: 'These days, lenders will often take a common sense approach to lending. If you have a good level of work experience in a certain industry, they're much more likely to accept self-employed income even if it has only been for a short period of time.'

Which lenders offer self-employed mortgages?

We analysed data from Moneyfacts to check which lenders would consider self-employed applicants and their main criteria for lending.

We found at least 78 lenders - including major players like TSB, Santander and HSBC - that would consider a self-employed applicant as long as they provided between one and three years' accounts.

David says: 'There has never been so much flexibility for self-employed people to get a mortgage. It should not be any more difficult than it is for those who are employed.'

How to boost your self-employed mortgage chances

While the options for self-employed mortgage borrowers are still healthy, there are a few things you can do to improve your chances of getting approved for a loan when you come to apply.

Use an accountant

If you're self-employed and applying for a mortgage you will normally need at least two years of accounts signed off by a certified or chartered accountant.

Prepare your SA302 forms

The SA302 form shows your annual tax calculations and most lenders will request the last three when you apply for a mortgage.

If you file your self-assessment tax return online you can print this off. If you do a paper tax return you will need to ask HMRC to send you a copy if you don't already have one.

Save a bigger deposit

As with any mortgage application, the bigger your deposit, the easier it will be to secure a deal at a good rate.

Most lenders will want you to have a deposit of 10-20%, but if you don't have a robust history of accounts you might need a bigger deposit to convince them you're a safe bet.