Mortgages Refused For Self-Employed Who Took Covid Grants

Some of Britain's biggest high street banks are refusing to give mortgages to self-employed people who received government grants during the pandemic. Mortgage brokers say those working in sectors like entertainment, hospitality and travel are the worst affected. Many lenders spoken to by the BBC are not accepting mortgage applications from people on furlough. Brokers said that banks often see people who have received Covid-related grants as high risk. Read more on the BBC website.

https://www.bbc.co.uk/news/business-57843756 

Being Self-Employed Blamed For One In Six Mortgage Rejections

One in six (17%) Brits say they were declined for a mortgage because they run their own business, research from specialist mortgage broker platform Haysto has found. A further 15% of sole traders, and 14% of directors of a limited companies, said they were turned down because of their job role. After being rejected 31% claimed they were left feeling depressed, while 29% felt they were treated unfairly. Read more on the Property Wire website.

https://www.propertywire.com/news/being-self-employed-blamed-for-one-in-six-mortgage-rejections/

Self-Employed People Have Little Expectations Of Securing A Mortgage

More than a third of self-employed would-be mortgage applicants didn’t go ahead because they expected rejection, a new study has found. One in five who applied were turned down because of insufficient proof of future earnings. The study, by specialist lender Together, found that 36% of self-employed people who wanted to buy a home of their own decided against applying in the past five years because they expected to be turned down. Self-employed borrowers are being put off before even applying for a mortgage or remortgage as they worry about strict rules on proof of earnings at High Street lenders. Read more on the Property Wire website.

https://www.propertywire.com/news/uk/self-employed-people-have-little-expectations-of-securing-a-mortgage/

Report Warns Of Self-Employed Homeownership Ambitions

Two in five (38%) self-employed borrowers are making “worrying lifestyle changes and professional sacrifices” just to get onto the property ladder, according to new research from online mortgage broker Trussle. Using insight from lenders and 2,002 self-employed mortgage applicants, the report reveals how challenging the journey to homeownership is for the UK’s 4.85 million self-employed workers. Compared to permanently employed applicants, the self-employed are said to be required to go through extensive affordability assessments, provide further documentation and can face extra costs during the mortgage process. As a result, more than one in eight (13%) self-employed borrowers have seriously considered abandoning homeownership ambitions. Read more on 24housing.

https://www.24housing.co.uk/news/self-employed-making-worrying-lifestyle-choices-to-get-onto-property-ladder/

Universal Credit 'Flaws' Mean Thousands Will Be Worse Off

Thousands of self-employed, agency, and zero-hours contract workers will be potentially hundreds of pounds a year worse off under universal credit. Analysis by Citizens Advice claims that flaws in the new benefit mean self-employed workers whose earnings fluctuate monthly could receive far less over the course of a year than employees in “traditional” jobs who earn the same amount. Its analysis shows that a self-employed worker earning £9,750 a year would be £630 worse off under universal credit than an employee with an identical annual income but paid a regular monthly salary. Read more on the Guardian website.

https://www.theguardian.com/society/2018/apr/12/universal-credit-flaws-mean-thousands-will-be-worse-off

Could Co-Owned Homes Help Solve The Housing Crisis?

Currently, the private rented sector naturally encourages increased rents: as properties are re-let, rents can be set against higher averages. There is also little tenant security.  Under the co-owned model, tenants are central: enterprises provide greater security through long-term lets (although tenants can leave when they want), and affordability, through rents benchmarked to lower market levels and or income levels. Reducing the biggest cost to households – housing – enables people to save (for a deposit, perhaps), and curbs imbalances between tenures. Co-owned housing is not simply a rental optional: it’s a credible alternative to home ownership. It would cater for many Londoners on incomes from £20,000 to £60,000, including the growing army of self-employed. Read more on the CityMetric website.

Universal Credit – Parliamentary Written Answer

Rachel Reeves: To ask the Secretary of State for Work and Pensions what estimate he has made of the number of universal claimants who will be self-employed once universal credit is fully rolled out.

Esther McVey: It is estimated that there will be approximately 600,000 households with at least one individual whose main employment is self-employment entitled to Universal Credit when it is fully rolled out.

Universal Credit Fraud Fears Raised By MPs

Government attempts to cut fraud by introducing the Universal Credit risk being "seriously undermined" by issues with housing benefits, MPs say.  The Work and Pensions Committee warned that gaps in the system could also increase the number of self-employed people working for "cash in hand". But the government said its reforms were expected to cut losses due to fraud by £1bn over the next five years. Read more on the BBC website.

Landlord Fears Universal Credit Could Deter Self-Employed

A housing association has warned the Government that strict new rules for Universal Credit could “totally undermine” efforts by landlords to support residents starting up their own businesses.  Nick Atkin, chief executive of Halton Housing Trust – which owns and manages over 6,200 homes in Cheshire – fired the warning in evidence to the House of Commons Work and Pensions Committee, which is examining the progress being made towards the implementation of Universal Credit.  Atkin warns strict Universal Credit qualifying criteria – which would see the self-employed having to report earnings every month as oppose to every year – could “totally undermine” the trust’s efforts to develop and nurture social enterprise through its support to small businesses.  Read more on 24dash.