More than half of the UK’s small business owners believe their employment status has damaged their chances of owning a home, with many reconsidering or delaying their property ambitions due to challenges in securing a mortgage.
New research from The Mortgage Lender (TML) reveals that 53% of small business owners feel being self-employed has negatively impacted their ability to get on the property ladder. Among those affected, one in five said they had considered abandoning their homeownership goals altogether, while others expressed fears that they might never be able to secure a mortgage. A further proportion reported delaying their plans due to fluctuating income.
The findings expose a growing disconnect between mortgage processes and the reality of self-employed working life. Many small business owners struggle with a lack of clarity and support when navigating the mortgage system, with 21% saying that understanding what additional documentation was required was the most challenging aspect of the process.
Others reported that there was simply not enough information available about how to secure a mortgage as a self-employed person, while some found the process itself confusing or were unable to identify lenders willing to consider their application. The result is that even those who proceed with an application often hit roadblocks — more than 43% of business partners surveyed said they had experienced mortgage rejections, either in full or in part.
To boost their eligibility, many small business owners have made significant lifestyle and career changes. Some have considered changing jobs or taking on additional work to increase income, while others have sought to cut costs by reducing social activities or cancelling subscriptions. A portion of respondents said they were leaning more heavily on a partner’s income to improve their chances of securing a loan.
Chris Kirby, Head of Field Sales at Shawbrook Retail Mortgages, said the research highlights the need for greater industry support. “Small business owners are a fundamental cohort of the self-employed, often leading businesses in their success and direction for the future,” he said. “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.”
Kirby urged lenders and brokers to collaborate and provide tailored advice and accessible mortgage solutions for self-employed clients. “There are potential solutions available that these customers aren’t aware of,” he added. “With better guidance and support, many could move forward with their homebuying plans without further delay or compromise.”
The findings come at a time when the UK’s self-employed workforce continues to grow, making it increasingly vital that mortgage lenders evolve to meet the changing face of employment and homeownership in modern Britain.
