Pepper Money’s Specialist Lending Study surveyed more than 6,000 people, with 77% of respondents reporting that being self-employed makes it more difficult to be approved for a mortgage.

According to the lender, one challenge many self-employed people face is that many mortgage lenders make affordability calculations based on the average of the past three years of profit – this becomes problematic when considering the impact of Covid restrictions over the past two years.

The study also found that 20% of self-employed people say that their business made more than 10% more profit in the last year than the previous two years.

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Paul Adams, sales director at Pepper Money (pictured above), said: “The self-employed play a vital role in the country’s economy and the respondents to the survey are largely correct in that it can sometimes be more difficult to secure a mortgage as a self-employed person — but it doesn’t have to be that way.

“There are many lenders, like Pepper Money, that specialise in lending to self-employed customers, with criteria and processes that are designed to meet the particular circumstances of self-employment, including the ability to lend on the most recent year’s figures, which can make an important difference in helping the self-employed achieve the loan size they deserve.

“It’s not just the self-employed who can benefit from this specialist approach.

“Our research found a quarter of all workers earn variable income, either from overtime or bonuses and the ability to consider this additional income is often an important factor in helping them to achieve the mortgage they deserve.”