Majority say their employment status has negatively affected home loan prospects
More than a third of gig economy workers are hoping to get on the property ladder, but many face barriers due to their employment status, new research from The Mortgage Lender (TML) has found.
According to the findings, 37% of those earning income through short-term or freelance work plan to buy their first home. However, 70% believe their job type has made it harder for them to secure a mortgage.
Among those who have applied for a home loan, 63% reported being turned down at least once. The most common reasons cited include lenders viewing their work as unstable (36%) or having unpredictable earnings (29%). Poor credit scores were an issue for 38%, while 33% admitted to missing a payment in the past.
Of those who said their employment situation had affected their plans to buy, 21% are now considering abandoning their homeownership goals. Fifteen percent said they would need to rent longer than expected, while the same proportion of respondents worried they might never qualify for a mortgage.
To make buying a home possible, many gig economy workers have had to make trade-offs. About 31% said they reduced spending on social activities, 30% are renting in areas they would have preferred to buy in, and 27% have moved to locations they did not want to live in. One in four delayed starting a family, while others pushed back property or personal plans.
Despite these setbacks, most gig economy workers remain hopeful. The research shows that 86% feel positive about their future, with nearly half (46%) expecting their income to grow and 44% saying they are making progress toward their goals. Over a third (37%) have already saved enough for a deposit.
An earlier study by TML highlighted growing calls from non-traditional workers — including freelancers, the self-employed, and gig economy earners — for greater government support to improve housing affordability and access.
“Getting on the property ladder is no small task, and this only becomes trickier for non-PAYE workers, who may have several income streams or fluctuating incomes, and therefore are more likely to face rejection from high street banks,” said Sara Palmer (pictured), sales and distribution director at Shawbrook Retail Mortgages. “It’s encouraging to see this barrier has not dulled the spirits of gig economy workers, who are taking steps to get on the property ladder.
“Speaking to a broker that has experience dealing with specialist cases and good relationships with specialist lenders will ensure that those on complex incomes get the support they need to fulfil their property ambitions.”
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