Over half (53%) of small business owners feel their employment status has negatively impacted their property ambitions, according to research from The Mortgage Lender (TML).
Of those who felt this way, 21% said they have had to consider abandoning their homeownership ambitions altogether, whilst 17% had concerns that they would never be able to get a mortgage, and 12% pushed back their property ambitions due to fluctuating income.
This is partly due to the difficulty that small business owners face when undertaking the mortgage application process.
- 21% said figuring out what additional documentation was needed was the most challenging aspect of the mortgage application process
- 19% said there wasn’t enough information about how to secure a mortgage as a self-employed person
- 17% said understanding the process itself was difficult
- 17% even cited that finding a lender that would lend to them was the most challenging part of the process
Even those who have been through the application process have had a tricky time. Well over two-fifths (43%) of business partners have said they’ve had some or all of their mortgage applications declined.
To help improve the possibility of getting a mortgage, small business owners have considered other ways to get a mortgage, including sacrifices to their lifestyle or taking on additional work.
- 21% have considered changing jobs to earn more
- 17% have considered taking on extra work to increase their take home pay
- 14% have reduced socialising to reduce their outgoings
- 15% have stopped their subscriptions to reduce my outgoings
- 20% have also considered relying on a partner's income to help obtain a mortgage
Chris Kirby, Head of Field Sales at Shawbrook Retail Mortgages, comments: “It’s clear that small business owners need more support from lenders and brokers in successfully progressing through the mortgage application process. Small business owners are a fundamental cohort of the self-employed, often leading businesses in their success and direction for the future. The fact that so many feel their employment status negatively impacts their ability to get a mortgage is a sign that the mortgage industry needs to address the issue and take action. Lenders and brokers must work together to help small business owners overcome the perceived barriers to homeownership that they are encountering, as there are potential solutions available that these customers aren’t aware of, and this could enable them to move forward with their home buying plans without further delay or compromise.”
