Examining why the company has chosen now to boost its offering in the space
Saffron for Intermediaries recently announced a number of mortgage product changes, including enhancements to its self-employed range.
The mutual’s self-employed customers are now able to apply for up to a 90% loan-to-value (LTV) product with both two- and five-year fixed rates at 7.07% and 6.87%, respectively.
But why has it enhanced its self-employed range now, and what further support does the sector need?
Why has Saffron enhanced its self-employed range?
Tony Hall (pictured), head of business development at Saffron for Intermediaries, said, as a lender, Saffron is always looking for ways to support borrowers who are underserved by the traditional mortgage market.
As a result, he added that Saffron commissioned an independent survey earlier this summer to better understand how self-employed workers feel about the mortgage market.
“The research found 19% believed that there was a good choice of lenders who offer self-employed mortgages, while 73% believed that being self-employed puts them at a disadvantage when applying for a mortgage,” Hall said.
The recent enhancements to its self-employed range, Hall said, aim to address some of the concerns raised by borrowers in this research, and increase consumer confidence in the self-employed mortgage market more broadly.
It is also worth noting, Hall added, that demand for self-employed mortgages is growing year-on-year, with a recent study by Twenty7Tec finding that demand for these products was 40% higher in January 2023 compared with January 2021.
“For some brokers, this will mean an increase in enquiries around a part of the market that they might not have a huge amount of experience in,” Hall said.
This is why, he added, lenders must place an emphasis on providing a broad range of self-employed solutions, but also on working closely with brokers to help borrowers on a case-by-case basis.
What support does the self-employed market need?
From a lender perspective, Hall said that the biggest area of focus is education.
The number of self-employed customers, Hall said, who believe they cannot access a mortgage because they are self-employed is sky high.
“Maybe they have approached their mainstream bank and have been told ‘no’ for whatever circumstances, but they must be aware that there are specialist lenders who are geared to help the self-employed,” he said.
The self-employed market, Hall said, is only going to continue growing through both necessity and desire.
Hall said economic conditions have encouraged some to make the move to self-employed working, while the sector also presents opportunities and rewards, such as flexible working patterns and being your own boss, which has encouraged others.
More than four million people in the UK are self-employed, equivalent to around 12% of the country’s workforce, according to a report by MoneySavingExpert.
As such, it is important, Hall said, that lenders support these self-employed customers the best they can through educational material on their websites, and support brokers by attending events to preach the ins and outs of the market.
“I believe that more lenders must share educational material to both consumers and brokers on the self-employed market, which will in turn produce greater consumer outcomes, and satisfy brokers’ and lenders’ goals simultaneously,” he said.
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