Smaller, specialist lenders are recognising this ever increasing opportunity in a growing niche.
Ken Hale is head of lending at Harpenden Building Society
The number of self-employed workers in the UK increased by 90,000 to reach a record high of 4.93 million in the three months to March 2019 but why are some still finding it difficult to secure a competitive mortgage in this modern age of working?
As is widely known, building a financial profile for the self-employed can be challenging with the inevitable peaks and troughs in income being a key reason for rejected mortgage applications.
Certain professions and occupations such as barristers; consultants and entertainers to name just a few, can be high earners with little risk of defaulting but they too can fall foul of standard, income eligibility checks.
The usual trawl of high street lenders can draw a blank with applications being refused when salary histories for the self-employed are inputted into an automated algorithm or where records of freelance earnings don’t go back far enough.
Smaller, specialist lenders are however recognising this ever increasing opportunity in a growing niche and continue to provide a more holistic approach when it comes to the self-employed, speaking with mortgage applicants and their brokers to gain the bigger picture, understanding details of the customer’s wider financial status - with an overall aim of saying ‘yes’ to the loan.
Jamil Qureshi, performance coach, psychologist, author and keynote speaker is a Harpenden Building Society customer introduced to us by one of our intermediary partners.
He’s given us permission to talk about his particular case, how as a specialist lender we helped him and that there is hope for the growing number of self-employed in the UK when it comes to securing the mortgage they need.
Jamil’s story
Jamil Qureshi is one of the world’s leading performance psychologists, and an expert in high performance.
He’s helped six people get to number one in the world of sport and delivered leadership programmes at board level for organisations all around the globe.
Early in 2019 Jamil began the process of buying a new home but encountered major problems when speaking with some of the lenders he approached.
Harpenden Building Society however was able to find answers to the problems he faced and ensure that he was able to buy his new home after many had refused his application.
Problems, not solutions
Jamil has a proven track record of helping people to overcome obstacles and delivering results.
In 2006, he was appointed as the first ever official psychologist to work with the European Ryder Cup team.
They made history when they won by a record-equalling margin. Jamil was voted one of the top 100 most powerful men in golf in 2008 by his international peers, and ranked among the most influential figures in British sport in 2009.
He has worked with footballers from Manchester United, Manchester City, Liverpool and Chelsea, and several Formula 1 drivers.
In 2009 he also worked with the England Ashes-winning cricketers.
With an outstanding track record, you would have thought that securing a new mortgage would be straightforward but that’s not what Jamil found.
Jamil said: “Along with my consultancy, my income comes through speeches to the sport and business community.
“The income is never totally guaranteed as we don’t have long-term contracts. With the removal of self-certified mortgages, I have had real problems as no-one was prepared to lend me the money.
“We were looking to re-mortgage a house so that we could buy a new home.
“Our income has always been stable and my accounts show year-on-year growth. I consider myself to be in a healthy financial position.
“For 12 years we’ve never missed a mortgage payment, and the move to the new property meant we were asking for a loan where the repayments would have been exactly the same as our present ones.
“It felt like there were so many things against us. No-one would look at us because we didn’t fit their computer algorithms.
“I have consistently earned a healthy income and never been out of work, yet people were not prepared to listen and look at our circumstances with a broad perspective.”
Harpenden flexibility
Harpenden Building Society, like other specialist lenders, has been working with customers with highly complex or unusual circumstances for many years.
Brokers recognise that Harpenden has a team of highly experienced underwriters who can speak directly to their customers and build a detailed picture of their circumstances.
Sarah Howe, Harpenden’s chief executive, said: “Lenders relying on PAYE income and expenditure as a guide will never get the true picture of the risk – it’s simply not enough.
“We feel the world of employment is changing and have built an underwriting capability and organisation which meets the needs of the modern workforce.
“Our underwriters look at the full financial position and speak with customers to understand their plans, asset portfolios and employment circumstances.
“Large organisations don’t have the appetite for detailed analysis in this way. We take a proportionate common-sense view when we have gathered the information.”
Bespoke service
Jamil found a broker who recommended Harpenden after he discussed the problems they were having.
He said: “The people I talked to at Harpenden were very personal and friendly. Most importantly they were prepared to listen and understand.
“They contextualised the situation and their approach was unique compared to what I have experienced with other lenders.
“They work in non-traditional ways, which is precisely what I talk about to business leaders all over the world.
“There was a real personality rather than just a call centre operating a computer.”
Jamil has worked with business leaders and companies helping teams to fulfil their potential by orchestrating change and performance programmes.
He has developed and delivered leadership programmes at board level for Coca Cola, Hewlett Packard, Emirates Airlines, Serco, O2, and Cisco Systems.
He has led teams responsible for change management in several high-profile areas.
He added: “One thing I found baffling was that it seems the world is changing but the financial institutions I dealt with are not.
“I believe many of the companies I encountered are going to be superseded by innovative and real-life players like Harpenden Building Society.
“Success in the future will be about remaining relevant to what people want. I think big banks are dead if they continue to operate like this for people like me.
“In reality, I don’t understand the detail of mortgages. I just want to be able to have a good night’s sleep knowing my finances are looked after.
“I wasn’t fussed about the names of products or the interest rate, I just wanted someone to help me to buy a new home.
“I wanted to deal with someone who had the same values as me. I sent the people I’d been talking to a note to say thanks and how refreshing it had been to deal with them.
“I then got a message from Sarah, the chief executive, thanking me for getting in touch. It seems that every part of the organisation is genuine and willing to treat people like normal human beings.”
