According to Haysto, one in six (17%) people were declined for a mortgage because they run their own business, or they are a sole trader (15%)
Eight in 10 mortgage customers who have previously taken a payment holiday are now back to making full repayments, according to UK Finance.
Some 130,000 mortgage payment holidays were in place at the end of December 2020, which is down from a peak of 1.8 million in June last year.
It means that, across the UK, one in every 84 mortgages was subject to a payment deferral at the end of last year, compared with one in six in June 2020.
Eric Leenders, managing director of personal finance at UK Finance, said: With new lockdown restrictions in place, the banking and finance industry is continuing to help customers through these challenging times, including by providing tailored support appropriate to their needs.
It will always be in the long-term interest of borrowers to resume making payments if they are able to do so, he said.
One in six (17%) people say they were declined for a mortgage because they run their own business, are sole trader (15%) or they are a director of a limited company (14%), according to specialist mortgage broker platform Haysto.
Despite record levels of mortgage applications, the number of rejections is also on the rise. Being turned down for a mortgage can have a devastating impact on people. Almost a third (31%) claim they were left feeling depressed, while 29% state they were treated unfairly.
The research also showed that over a third of Brits – 35% – feel they could not get a good mortgage deal for themselves and so would not want to go through the stress of applying or are unlikely to apply at all for fear of being rejected.
Paul Coss, co-founder of Haysto, said: Getting a mortgage when you’re self-employed can be difficult, as mortgage lenders tend to prefer people in full-time employment because it’s easy and simple to understand their income. Being self-employed, your income isn’t as straightforward, and people shouldn’t be penalised for that.
He said, despite self-employed people usually earning more money than if they were on a salary, mortgage lenders just aren’t set up to deal with complex incomes.