The mortgage market has yet to fully adapt to the growth of freelance and self-employed working, according to Many Hands Mortgages.
The East London brokerage said many freelancers continue to approach the homebuying process expecting difficulties, despite often earning strong incomes and running successful businesses.
It argues that while working patterns have changed significantly over the past decade, mortgage affordability assessments have not always kept pace, leaving some self-employed borrowers feeling disadvantaged compared with employed applicants.
Many Hands Mortgages said freelancers can still face challenges because income is often viewed as less predictable than that of borrowers in permanent employment, even where earnings are comparable.
UNIQUE INSIGHT
George Cassavetti (main picture), mortgage broker at Many Hands Mortgages, said his own experience as a freelancer before entering the mortgage industry has given him a unique insight into the issue.
Prior to becoming a broker, Cassavetti worked in television as a First Assistant Director on a freelance basis, initially as a sole trader before operating through a limited company.
He said: “Freelancers are often incredibly resourceful financially because they have to be. You become used to managing uncertainty, planning ahead and balancing multiple streams of income. But on paper, you aren’t seen as secure as a permanently employed borrower.”
The brokerage said self-employed applicants often have more complex income structures than employed borrowers, with earnings potentially split between salary, dividends, retained profits or income generated through multiple clients.
As a result, borrowing capacity can vary significantly depending on how individual lenders assess income.
FLEXIBLE WORKING
Andrew Cherry, director of Many Hands Mortgages, said: “Modern careers rarely fit neatly into one box anymore. Particularly in cities like London, we’re seeing more people working flexibly, building portfolio careers or running their own businesses.
“The mortgage industry is adapting, but often people still feel they need to justify careers that are actually very established and financially sound.”
According to the firm, many freelance professionals delay discussions about purchasing property because they assume self-employment will count against them when applying for a mortgage.
However, it said lender approaches to self-employed income continue to evolve, with some increasingly willing to consider retained profits and longer-term earnings trends alongside traditional affordability measures.
“Quite often, freelancers have simply been given overly generic advice.”
Cassavetti added: “Quite often, freelancers have simply been given overly generic advice. Once somebody actually understands how their income works and which lenders are comfortable with that structure, the process can suddenly feel far less intimidating.”
Many Hands Mortgages said the continued growth of freelance, consultancy and entrepreneurial careers means lenders and advisers must increasingly adapt to income patterns that do not fit traditional employment models.
Cherry added: “The reality is that modern working life has evolved far faster than many people’s perception of what a ‘safe borrower’ looks like. Good mortgage advice should be about understanding the individual sitting in front of you, not just ticking boxes.”