Kent Reliance has improved its criteria for self-employed applicants.
The lender will now consider standard residential mortgage applications from professional, self-employed applicants who have been trading for a minimum of 12 months, down from 36 months.
The Bank of England’s 2015 Q3 quarterly bulletin recorded 700,000 new self-employed professionals since 2008, taking the total to 4.5 million, or nearly 15% of the UK’s workforce. The majority of lenders require a two or three year track record of self-employed earnings. This approach prohibits access to mortgage finance for the newly self-employed.
Professional, self-employed applicants applying for standard residential mortgages will be subject to the following criteria:
- Income to be based on the finalised accounts prepared by the accountant acting for the business who must be suitably qualified
- Projection for second year income must be provided by the accountant
- Applicant must have a minimum 12 months previous track record in the same sector as their current business. This must be evidenced by proof of previous PAYE income
- Maximum LTV of 85%
- Three months personal and business bank statements must be provided
- Self-assessment returns or SA302 are not accepted as proof of income
- Income will be verified by means of an accountant’s reference.
Examples of professional applicants that could apply for these mortgages are: doctors, lawyers or accountants or those who hold other professional qualifications.
Adrian Moloney, director of sales at Kent Reliance for Intermediaries, said: “The self-employed are making up an increasing proportion of the modern workforce. Despite the financial success of many within this group, this hasn’t yet been reflected in the mortgage market. We are looking to change this, supporting self-employed professionals, and their brokers looking to place these cases.
“We’ve had feedback from brokers that they find these type of loans especially hard to process, so we are widening our criteria to increase our flexibility in this market, which will aid both distributors and their clients. These changes support our commitment to be a specialist, personal and flexible lender for those who are not effectively served by mainstream providers.”