The self-employed sector is a large and growing part of the UK workforce with nearly 5 million people being self-employed today.
This comes from a report on behalf of the Work and Pensions Committee of the House of Commons in April 2017, revealing that self-employment represents 15% of our total workforce.
What’s more, the number of new businesses registered in the UK reached a record high of 657,790 in 2016 according to data from Companies House. This is equivalent to 75 new businesses being formed every hour and beats previous highs of 608,110 in 2015 and 581,173 in 2014.
Expectations are that we’ll continue to see the self-employed sector growing in importance well into the future.
The ups and downs
It’s easy to see why owning your own business and being self-employed have become so popular. Yes, there are risks, but you reap the rewards of your own efforts and you have the freedom to decide how you want to work.
Being self-employed isn’t, however, without its challenges, some of which can arise in unexpected ways – such as applying for a mortgage.
The reality is that if a self-employed borrower has less than 3-years trading accounts to show, the number of lenders that will be willing to consider their mortgage application will be considerably less than if they were in a salaried job.
And if the borrower can only produce 1 year’s trading accounts, then their options will be reduced further.
The Holy Grail
Historically, this has been a big issue for those contemplating setting-up their own businesses. The good news, for both the borrower and brokers, is that there are options available, mainly through specialist lenders.
As specialist lenders tend to only accept cases through brokers, it presents brokers with the Holy Grail, the potential for a constant flow of new clients - remember 75 new businesses every hour?
So as self-employment rises further, it makes good sense to know which lenders will be able to help your clients, despite them having just one year’s accounts.