How you could help your self-employed clients get onto the property ladder
By Nathan Goodridge | 11 August 2020
SUMMARY: Nathan Goodridge, National Account Manager at Kent Reliance for Intermediaries discusses how brokers can help their self-employed customers access lending in the current climate.
Being self-employed has its obvious benefits: the freedom and flexibility to choose jobs and hours to name a few. It’s no surprise, therefore, that by Q4 2019, there were more than 5m self-employed people in the UK, a huge increase from 3.2m in 20001.
However, the one major downside is that it can be more difficult to access lending, especially when it’s a sector of the market that’s currently experiencing an observable impact from the COVID-19 crisis.
By 30 June 2020, 2.6 million of the potentially eligible population had claimed a Self-Employed Income Support Scheme (SEISS) grant with the value totalling £7.4 billion2. At the best of times, most creditworthy self-employed borrowers can struggle to secure finance due to a lack of a consistent monthly salary; but in the current environment, it’ll arguably be even harder.
With many of the UK population wanting to take advantage of the current stamp duty cuts, your role as a broker, now more than ever, is vital to help your self-employed clients get onto the property ladder.
So how can brokers help?
Through specialist knowledge
Many brokers have existing relationships with specialist lenders and can pinpoint those that are able and willing to cater for complex client needs.
Brokers are also able to keep abreast of product changes, and therefore know which lender has a suitable product for their client’s specific circumstances. This knowledge is invaluable.
Through strong lender relationships
Once brokers have identified a supportive lender with the right product for their client, the goal is to guide them through the process as quickly and smoothly as possible. This involves presenting the best possible case for getting the mortgage approved. There are several steps brokers can follow to do this:
- Ensure your client is using a chartered or certified accountant as many lenders won’t accept information from a bookkeeper. An accountant will also make sure that all the accounts and self-assessment tax submissions are up to date before the bank is approached.
- Check your client is aware that their accountant has information on tax returns as lenders will also look at this. Whilst these used to be from HMRC’s SA302 forms, lenders have now been told to look at an accountant’s own systems for tax year overviews.
- If your client’s business has made a loss over the last few years, or has seen a reduction in net profits, an explanation will need to be provided to the lender. This doesn’t necessarily mean the client won’t be approved for a loan. However, they should check with their accountant about this prior to an application being made just in case.
Through providing a detailed application
When guiding a self-employed client through the application process, the devil really is in the detail. Making sure the client has all the necessary documentation prior to submitting an application will make a significant difference to clients’ outcomes. Kent Reliance for Intermediaries has created an application checklist to help when putting case information together.
How Kent Reliance for Intermediaries could help
The specialist lender operates a little differently to others by individually assessing each case, providing a more human and considered approach to underwriting. Its flexible criteria, which considers self-employed and contractor clients (including those on the SEISS), could be the answer you need.
Get in touch with your senior business development manager today to find out more about how you could get your client on the property ladder.
1 Office for National Statistics - Annual Population Survey
For Professional Adviser Use only
Nathan Goodridge is National Account Manager at Kent Reliance For Intermediaries