28% of sole traders - a self-employed person who owns and runs their own business as an individual - have never tried to get a mortgage and are the least likely self-employed group to try and do so. Looking into why this is, assumptions of mortgage rejection or perceived difficulty are preventing sole traders from reaching their property goals according to research from specialist lender, The Mortgage Lender (TML).
When asked why they hadn’t applied:
- 26% of sole traders simply think they won’t be approved for a mortgage
- 17% say they heard it’s more challenging for someone who is self-employed
- 10% say they find the mortgage process too daunting
- 24% blamed their fluctuating income saying they had had to push back their property ambitions
- 18% say they were worried about their employment status stopping them from getting a mortgage
Employment status was a key concern as:
- 38% say that their employment status has negatively impacted their ambitions to buy a property
- And 15% say they’ve considered abandoning their property plans
However, many sole traders still have cause for optimism:
- Two-thirds (68%) are optimistic that they will be able to achieve their property goals in the next 5 years.
Sara Palmer, Distribution Director at The Mortgage Lender (TML), comments: "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. 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. We regularly review our criteria to best help people achieve their property ownership goals.”
