What's stopping them from applying for a home loan?
More than a quarter (28%) of sole traders have never attempted to secure a mortgage, making them the least likely group among the self-employed to do so, according to research by specialist lender The Mortgage Lender (TML).
The findings suggest that concerns about rejection or the perceived complexity of the mortgage process are key barriers for this segment of borrowers. Among those who had not applied, 26% believed they would not be approved, while 17% had heard it was more difficult for self-employed applicants. Another 10% found the process too daunting.
Fluctuating income was also a concern, with 24% saying it had forced them to delay their property plans. In addition, 18% worried that their employment status would prevent them from qualifying for a mortgage.
Employment status emerged as a major factor influencing property aspirations. Thirty-eight percent of sole traders said it had negatively affected their ability to buy a home, and 15% had considered abandoning their plans altogether.
Despite these challenges, many sole traders remain optimistic, with 68% confident they will achieve their property goals within the next five years.
“While the hurdles to homeownership can be especially high for sole traders, it’s encouraging to see that so many of this cohort are still keen to pursue their homeownership plans,” commented Sara Palmer (pictured), distribution director at The Mortgage Lender. “This is a testament to their resilience, and as lenders, we must recognise this ambition and ensure we’re aligning our product offerings to match.
“Sole traders are responsible for their own businesses and contribute a significant amount to our economy, so should not be penalised when it comes to how their income is generated.”
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