Approximately a third of contractors have had difficulty being accepted for mortgages since switching from a permanent job, according to research from specialist mortgage lender Kensington Mortgages.
Head of Sales and Marketing at Kensington, Sarah Green added:
“Contractors, who can earn steady income despite not having the security of a regular payslip, can prove troublesome to some lenders. However, the world of work is changing. It is clear the number of contractors is increasing and that in many cases they earn more than they would in staff jobs.”
The study emphasized the growing contractor market estimating approximately 1.23 million are working as full or part time contractors. This number is only expected to rise, Kensington believe this is due to attitudes to employment changing.
Kensington also emphasizes the attractiveness of contractors’ mortgage business for lenders. One of the key issues for mortgage lenders is the perceived variability of a contractor’s income – however the study estimates that around 42% of contractors earn more than they did in permanent employment. Furthermore 45% have been working on contracts for over 2 years with roughly 17% having 10 years or more of experience contracting.
These recent figures come as no surprise, with the UK’s largest building society, Nationwide, opening their door to contractors. The contractor friendly lender has also boosted its support for first time buyers and those with a small deposit.
Mark McBurney, Senior Mortgage and Protection Consultant at Contractor Mortgages Made Easy said, “due to the growing contractor market, we now have the ability to influence lenders to open their doors to contractors."
Virgin Money also recently announced an overhaul of their lending policy, which could see them become a genuine option for many contractors looking for a mortgage. Virgin Money who are consistently in the top 3 for market leading rates are giving Contractor Mortgages Made Easy exclusive access to underwriters directly, in order to assess each case on its own merits.
Mark McBurney adds, “The financial services industry urgently needs to address the needs of contractors and freelancers and should consider this an opportunity for attractive and reliable new business.”
Article By: Bradley George, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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