IPSE and CMME call on the government to end mortgage discrimination against the self-employed

24th March 2022, London: IPSE (the Association of Independent Professionals and the Self Employed) and specialist mortgage provider for contract workers CMME are today calling on the government and the mortgage industry to end the discrimination against the self-employed, following research finding that almost 7 in 10 (68%) contractors believe that they are being punished by financial services for going freelance.

Despite the record increase in first-time buyers post lockdown, a recent report published from CMME and IPSE found that only 1 in 10 self-employed workers (12%) are planning to purchase a property in the next five years. Moreover, the report found that almost 1 in 5 (19%) freelancers believe that they are treated fairly by lenders, with a further 2 in 5 (38%) arguing that the process of getting a mortgage is either somewhat or very difficult. For context, the increase in somewhat or very difficult cases represents a 57% increase since 2020.

Following the report’s findings, IPSE and CMME have today published a manifesto calling for the end to mortgage discrimination against self-employed workers through four key steps:

  1. Government and the mortgage industry should work together to explore tailored products and ways of making it easier for the self-employed to successfully apply for mortgages
  2. Mortgage lenders should ensure that their advisers are fully trained to understand the self employed sector and their financial situations.
  3. Government should ensure that self-employed people who have made use of mortgage payment holidays, the SEISS scheme or the job retention scheme, are able to access other loans in future without being penalised
  4. Modernise the tax and employment system to make it easier for lenders to assess freelancers’ financial situations and de-risk them as customers.

Andy Chamberlain, Director of Policy at IPSE said: “After decades of frustration, unfairness and prejudice, it is finally time for the government and the financial services industry to wake up and end the discrimination against self-employed workers. For too long, freelancers have found it far too difficult to access a mortgage, with lenders unfairly shutting down mortgage applications and forcing thousands off the housing ladder for being self-employed.

“While the Self-Employment Income Support Scheme was a lifeline for thousands of freelancers during the pandemic, our research has shown that 2 in 5 (40%) people who accessed the program believe that they could be penalised in a mortgage application. We are therefore calling for the government and the industry to solve this issue and ensure that those that needed SEISS to survive aren’t financially damaged long term.”

Mike Coshott, CEO at CMME, said: “As we come out of the pandemic, it is paramount that self-employed workers can confidently access mortgages and other financial products, without fear of judgement and prejudice for being a freelancer. For too long, contract workers have found it far too difficult to access financial support and following increased uncertainty during the pandemic, it has never been a more important time to alleviate the barriers that freelancers face. Today’s manifesto offers the government and industry a roadmap to recovery and financial stability for self-employed workers, with measures such as extending the mid-life MOT being a potential lifeline to thousands of freelancers.”

With the self-employed facing serious issues around their pensions and insurance, the manifesto also details how the government, and the industry can solve these issues too.