Challenging markets: growth in contractor employment

13 March 2019

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Last time in this three part series of challenging markets, we looked at remortgages. In this final edition, we'll cover growth in contractor employment.

15.1% of the UK is now self-employed¹. Contracting is also on the rise with many looking for a better work-life balance. Many contractors struggle to meet lenders’ criteria, and it becomes challenging for brokers to find mortgages that cater for different types of income and employment.

Lenders tend to look at contractors as self-employed, or consider a small portion of their income rather than its entirety. However, contractors can have just as stable and reliable incomes as those in full time employment. Some have committed daily rates, holiday and sick pay benefits, as well as transferrable skills which could make them more employable. Some also benefit from a better income than if they were traditionally employed.

We’re already seeing an increase in contracting employment and some firms have started offering similar benefits to those who would be full time employees. All of these variables mean standard automated application systems may not accept these applicants, even though they’re credit worthy and reliable borrowers. It’s frustrating for both the customer and the broker. But we’re seeing more lenders adapting to these changing markets and working with brokers to understand how they can serve customers better. After all, a growing market means more sales opportunities.

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