The initiative was prompted following feedback from brokers that viable borrowers were being denied mortgages due to being self-employed during the current crisis.
Beverley Building Society has launched a 'Bounce Back' mortgage initiative, with criteria aimed at helping self-employed workers achieve homeownership.
Potentially open to people with as little as one year’s trading history, the initiative is aimed at helping both established and newly self-employed people.
The products available include the potential for owners of established businesses to start with lower, interest-only based payments.
For the newly self-employed, the products include up to 75% loan-to-value (LTV) from one year's accounts.
For established businesses, the first 12 months’ payments interest-only and LTVs of up to 80% will be considered.
There are a range of discounted 2 and 3-year deals available, with affordability calculated on a capital and interest basis.
Lending decisions will be made on basis of longer-term trading track record, industry, professional qualifications and experience and future prospects; all trades and professions will be considered.
People whose business has been temporarily impacted by the pandemic are welcome to apply.
The society was prompted to launch the initiative after feedback from brokers highlighted a need for solutions to help the significant number of self-employed borrowers struggling to secure mortgages because many lenders have frozen them out, viewing them as high risk.
Brokers suggested that this view is short-sighted, given that in many cases a strong trading track record overall makes them positive prospects for lending, despite recent developments.
Recent Office for National Statistics (ONS) figures have suggested that the household incomes of self-employed people in the UK were significantly worse-affected than the employed due to COVID-19.
For example, between 3 April and 30 April, 60% of self-employed workers reported a drop in income, compared to 22% of the employed.
Steve Giles of Swanland Mortgages said he is finding it difficult to help some clients because lenders have ruled out self-employed lending altogether for the time being, or are not willing to make common sense decisions based on someone’s qualifications, experience and trading track record overall.
Giles said: “I think it’s great that the Beverley is listening to what we are saying by flexing its criteria for self-employed people, and I hope that its move will prompt others to look again at their risk view of this traditionally very resilient sector of the market.”
Graham Carter, head of lending at Beverley Building Society, said: “As a smaller Society, our approach is based on being able to take the time to really listen to people’s whole stories and make common-sense decisions on even the most complex cases, in order to do our best to help.
“Mortgages for self-employed people are among a range of niches we specialise in, alongside self-build, later-life and family-assist packages and lending on unusual properties.
“Essentially, we’re always keen to think outside the box, and do our utmost to help, and seeing the impact this crisis has had on this vital segment of the UK economy, we just felt like we needed to step in, and came up with this new offering to do exactly that.”
Tom Wadsworth, who lives on the south bank of the Humber, is among the self-employed people Beverley Building Society has helped onto the housing ladder in recent years.
Wadsworth said: “When I was self-employed, other banks and building societies wouldn’t entertain helping someone like me.
"The Beverley’s support was critical to me getting my first step on the housing ladder.
“I know self-employed people who are now feeling the strain of the lockdown and having to work with social distancing measures, it’s having a big impact on how much work they can take on and therefore their level of income.
"A mortgage like this could be a lifesaver for people in this situation.
“I’m still with the Beverley and always recommend them to anyone who’s looking for a mortgage, especially if they are self-employed.”
