The UK’s self-employed workforce is growing but when it comes to getting a mortgage, many are still finding the door only half open.
New research from Shawbrook Bank reveals that despite nearly eight in 10 (79%) self-employed workers never missing a financial payment, a significant number are still penalised when applying for a mortgage.
One in three (34%) say they’ve been turned down because their credit score wasn’t deemed strong enough, while 30% cite lenders viewing their income as too volatile. Another 28% say their very profession was labelled too “irregular” to qualify.
It’s a problem that runs deeper than credit files. The self-employed, who now account for around 4.3 million people across the UK, often sit outside the neat boxes lenders like to tick.
Annual accounts can fluctuate, dividends can be irregular and many use legitimate tax-efficient structures that don’t fit conventional affordability models.
The result? Perfectly creditworthy borrowers being shown the exit before the viewing’s even begun.
Yet there’s a flicker of good news in the gloom. Shawbrook’s figures show that mortgage rejection rates for the self-employed have almost halved - from 45% last year to 24% today. That’s progress. But it still means one in four self-employed applicants are being turned down at least once, and thousands more never apply because they assume they won’t qualify.
THE BROKER ADVANTAGE
This is where mortgage brokers can make a real difference. For employed applicants, most of the work happens after the offer.
For the self-employed, the heavy lifting starts long before the application.
A good broker knows which lenders are comfortable with complex income streams – from limited company directors who pay themselves in dividends to sole traders with seasonal cashflow.
They also know which underwriters are willing to look beyond the black-and-white of a credit score to see the full financial picture.
Steve Griffiths, Commercial Director for Retail Mortgages at Shawbrook, puts it plainly.
“There’s a clear disconnect between the realities faced by self-employed borrowers and the rigid lending criteria they encounter,” he says.
“With brokers having greater clarity on how specialist lenders can offer tailored solutions, particularly when it comes to understanding annual accounts and cashflow for business owners, self-employed borrowers are better able to navigate the market with confidence.”
That “clarity” often comes from experience. Many mainstream lenders still rely heavily on automated systems and standardised affordability assessments, but specialist lenders – often accessible only through intermediaries – can manually review accounts, assess sustainable income over multiple years, and offer more flexibility.
APPROVAL SUCCESS
For brokers, helping self-employed clients secure a mortgage starts with preparation, not paperwork. Here’s where expert guidance can turn rejection risk into approval success.
EARLY AUDIT OF ACCOUNTS
If you’re self-employed and looking for a deal you need to have at least two years of full, signed accounts, ideally prepared by a qualified accountant. Even if income varies, demonstrating a consistent or upward trajectory can make a strong case.
PERSONAL AND BUSINESS FINANCE ALIGNED
Many self-employed clients mix personal and business funds, which can raise red flags. A broker can help them tidy up their financial presentation before submission.
CREDIT PROFILE MANAGEMENT
While 34% of rejections are still credit score–related, brokers can spot and address small issues – from old defaults to unused credit cards – that might otherwise derail an application.
DEPOSIT STRATEGY
Some lenders offer better rates for higher deposits, so advising clients to build even a slightly larger down payment can help offset perceived risk.
DOCUMENT CHECKLIST
Business bank statements, SA302s, tax year overviews… the right paperwork, presented cleanly, can make or break a case.
In short, brokers translate self-employed income into a story lenders can understand.
COST OF DELAY
Shawbrook’s data also captures the toll of repeated rejection. Nearly a third (29%) of self-employed people say they’ve rented longer than they wanted to, while 21% have delayed other major life goals. Fourteen percent have even held back on expanding their business to prioritise mortgage eligibility.
That’s not just personal frustration, it’s economic drag. Britain’s self-employed are a vital engine for growth, innovation and flexibility in the workforce. Excluding them from homeownership isn’t just unfair, it’s inefficient.
REJECTION TO RESOLUTION
The encouraging news is that rejection rates are falling, down from 45% to 24% in a single year. That suggests lenders and brokers alike are learning how to handle this increasingly important segment of the market.
But barriers remain. Lenders’ risk models still lag behind the reality of modern work, where portfolio careers and multiple income streams are becoming the norm.
Until affordability assessments evolve to reflect that, brokers will continue to play the role of interpreter, helping self-employed clients navigate an outdated system with precision and patience.
The key, as always, is preparation. Mortgage success for the self-employed isn’t about tricking the system; it’s about understanding it better than anyone else.
With the right broker, the right documentation, and a realistic budget, those “computer says no” moments are starting to fade into history.
Information contained within was correct at the time of publication but is subject to change.
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