A study by the Office for National Statistics has shown that more than 4.6 million people are now self-employed. Research suggests that around half of these people will struggle to get onto or up the housing ladder.

For employed applicants, proving your income is relatively straight forward. In most cases you just need 3 of your latest payslips along with bank statements to back them up. For self-employed applicants however, it isn’t quite as straight forward. In most cases you will be needing 3 years accounts or SA302’s (which take at least 2 weeks to obtain causing a significant delay on the whole process).

The other issue is that with employed applicants it is fairly straight forward for a lender to decide how much is affordable to you however for people that are self-employed it can be open to interpretation. This can mean that even if a decision in principle is agreed, there is a good chance the amount a lender is willing to loan you could change once they have assessed everything.

Our advice to those people who are self-employed is to make sure that before applying for a mortgage you make sure you have suitable documentation to prove your income. It is also important to have a big enough pot of money for the deposit but also a little extra if needed to reduce the loan to value to keep the lender happy. Different lenders take into account different figures such as net profit, dividend and salaried income. For this reason the way in which your income is derived can significantly influence which lenders you should approach making it important to consult a mortgage advisor on the best route to take. 

After a quiet third quarter in the property market there is an expectation that things are going to pick up in the final three months of the year.

According to a report by Reuters, the credit conditions survey showed that in the third quarter of 2014 there was the biggest fall in the amount of credit the lenders were able to supply since the last three months of 2008, when the Lehman Brothers collapsed. (http://reut.rs/10IHmRT)

We have already seen a number of lenders reducing their rates and others are expected to follow in a battle to gain market share and hit end of year targets which may have slipped away due to the quiet summer.

This could be an ideal time to either obtain a new mortgage or remortgage a current property to secure a cheap fixed rate product. There is an expectation of an interest rate increase at some point next year which means we may never see rates this cheap for some years.