Self-employment or homeownership—why can't young people have both?
New research from Nottingham Building Society has found that Millennials and Gen Z in the UK are increasingly forced to choose between starting their own business and owning a home, with concerns about mortgage eligibility deterring many from pursuing self-employment.
According to the findings, nearly half (48%) of 25–34-year-olds and a majority (58%) of 18–24-year-olds aspire to start their own business but fear it could impact their ability to qualify for a mortgage. Additionally, 50% of those aged 18-24 admitted they had never seriously considered turning their hobbies or passions into a career due to concerns about mortgage approval.
Financial challenges remain a significant barrier for younger homebuyers, with over a third of under 35s believing they will require financial assistance from friends or family to secure a mortgage.
Self-employment and mortgage struggles
The research highlights a growing challenge for young entrepreneurs, as traditional lending models often prioritise regular employment over self-employment. The latest UK labour market data shows that 4.4 million people were self-employed as of November 2024, making up 13.1% of the workforce. However, self-employed individuals working full-time earned a median income 21% lower than their employed counterparts in the 2022/23 financial year.
With the average first-time buyer in the UK now aged 34, younger generations face an increasingly difficult decision between financial stability and entrepreneurial ambition. Many see the mortgage system as outdated, failing to reflect the realities of a modern workforce that includes gig workers, freelancers, and small business owners.
Calls for more flexible lending
Industry experts argue that mortgage lenders must adapt to accommodate non-traditional income streams. “The choice between pursuing your passions and owning a home should not be one that anyone has to make,” said Praven Subbramoney, chief lending officer at Nottingham Building Society. “Young people are brimming with creativity and ambition, but our research reinforces what we’re hearing time and time again from brokers; that outdated lending models are holding too many young people back.”
He added that supporting entrepreneurs in achieving both their career and homeownership goals benefits not only individuals but also the wider economy: “Small businesses and sole traders are often at the heart of our communities, and if they never have the chance to get off the ground, then society misses out.”
With affordability pressures persisting, Nottingham Building Society is among lenders calling for a more flexible approach to mortgage eligibility. Experts suggest that reforms recognising self-employment and variable income sources could provide young people with the confidence to pursue both their business ambitions and the dream of homeownership.
Have you faced challenges balancing homeownership goals with other priorities? Share your experiences and thoughts in the comments.
