Around 300,000 self-employed UK adults expect to be in a position to buy a home within the next three years but most believe accessing a mortgage remains a major hurdle.
Research from Pepper Money shows that 76% of self-employed borrowers think their employment status makes it harder to secure a mortgage, highlighting ongoing challenges for non-traditional income applicants.
The findings, based on a survey of 4,000 UK adults, point to a growing disconnect between aspiration and access to finance.
Demand remains strong, with 80% of self-employed workers aspiring to homeownership—higher than both full-time and part-time employees.
KNOWLEDGE AND CONFIDENCE GAPS
More than a third (36%) of self-employed respondents said they do not know what size deposit they would need to buy a property.
Concerns around debt are also weighing on sentiment, particularly among newer self-employed workers. Of those who have become self-employed in the last three years, 81% said they are worried their existing debt could impact their chances of securing a mortgage.
The research comes as the structure of the UK workforce continues to evolve, with more people working across multiple income streams, contracts or self-employed roles.
Despite this shift, mortgage lending criteria have struggled to keep pace, with many borrowers finding it difficult to evidence income in a way that fits traditional underwriting models.
The issue is compounded for those with adverse credit histories. The study found that 30% of UK adults – equivalent to 16.6 million people – have experienced adverse credit at some point, up from 15.3 million a year earlier.
HOMEOWNERSHIP GOALS
Paul Adams, Sales Director at Pepper Money, says: “The start of the tax year is often the moment when many self-employed people take stock of where they are financially and start thinking seriously about their financial goals, including homeownership.
“What this research makes clear is that aspiration isn’t the problem – this is telling at a time when confidence is low in other parts of the market.
“Self-employed customers are often financially resilient, but their income can be harder to assess through standard lending models.”
Pepper Money says the findings highlight the growing importance of specialist lending solutions as the mortgage market adapts to changing employment patterns.
