Many of us would say our world has been turned upside down by the COVID-19 pandemic. And it has certainly been nice to see a return to something akin to reality in the past few weeks.
Though saying we are out of the woods would be premature, that reality seems closer now than it has for a long time.
So are things going to go back to the way they were pre-pandemic? It seems that for many self-employed workers, this is not yet the case from a financial perspective.
What’s the situation with the self-employed?
According to new statistics from The Mortgage Lender, as many as 85% of self-employed workers, including contractors and freelancers, are yet to see their income bounce back to pre-pandemic levels.
The stats make for devastating reading for the UK’s self-employed sector, with around 28% indicating they have seen their income drop by more than half. A further 16% have had to deal with income drops of between 25% and 50%.
This is obviously a huge chunk out of any monthly and annual pay package. This kind of deficit will inevitably impact the financial plans of those who have had to endure such losses.
What kind of impact has this had?
Any drop in income is going to have a major impact on the lives of self-employed workers, or any type of worker for that matter.
But the effect of the pandemic has seemingly really dampened many self-employed workers’ ambitions around home ownership.
According to The Mortgage Lender’s findings, just over half of those surveyed believed it was now more difficult for self-employed workers to secure a mortgage. Perhaps most alarmingly, 53% said they had been put off even applying for a mortgage because they were self-employed.
Where does this leave things?
These recent findings are obviously concerning, and it must be hoped that the UK economy and the self-employed sector makes a swift recovery.
Though these trends are certainly at play, there are still plenty of reasons for optimism as a self-employed worker. Each will have had a different journey through the pandemic, and with normality hopefully coming back, it is possible that incomes will be on the rise again sooner rather than later.
Perhaps the most concerning thing from a mortgage industry perspective is the impact of these drops on mortgage applications. The reluctance for many self-employed workers to even apply for a mortgage because of their work status is bound to affect the wider industry.
Though each person’s financial situation is different, if you are a self-employed worker considering making a step onto the housing ladder, rest assured that there are people in place to help deliver a positive outcome.
Get the support you need
Specialist contractor mortgage brokers are in the best position to deliver a tailored service and provide self-employed contractors with the guidance and support they need to secure a mortgage befitting their personal circumstances.
There are also many lenders out there who are well equipped to lend to self-employed workers. Initiatives such as the government’s 5% deposit mortgage push also offers greater backing for both lender and applicant.
So if you are a contractor, freelancer or self-employed worker who had plans to get onto the property ladder or to move up it, but have found yourself negatively affected by the pandemic from a financial perspective, all is not lost. While you may think that your chances have been scuppered, this is not necessarily the case.
If you are unsure, simply get in touch with a specialist mortgage broker and discuss your situation with them, and see if a positive outcome can be reached.