Q1 2017 First Time Buyer Index: No Hope For Two Thirds Of Self-Employed First Time Buyers

POSTED: 16th March 2017
IN: Newsroom
  • Nearly two thirds (62%) of self-employed people do not know how they will manage to buy their first home whilst a third (32%) of recent first time buyers say they had to give up being self-employed to get a mortgage
  • Raising the deposit remains the biggest obstacle for first time buyers and a quarter (26%) hope to borrow from their parents
  • Almost half (46%) of first time buyers believe that the issue of rising house prices should be addressed and almost two in five (39%) believe the Help to Buy scheme should be extended
  • Over two thirds (67%) of aspiring first time buyers believe that getting on the property ladder is very difficult – remaining the same quarter-on-quarter

Getting on the property ladder in the UK is no mean feat, even more so for those who are self-employed. The latest quarterly First Time Buyer Index[1], published by Aldermore, the specialist bank, found that two thirds (67%) of aspiring first time buyers feel that getting on the property ladder is difficult.

Self-employed woes

New insight shows that almost seven in 10 (68%) of self-employed first time buyers think that getting on the property ladder is difficult and three in five (62%) do not know how they will ever manage it. For almost one in three (32%) raising the deposit is the biggest obstacle, whilst for one in seven (14%), the biggest hurdle is just being able to secure a mortgage. Things can get so hard that almost a third (32%) who have recently bought actually had to give up being self-employed in order to get a mortgage, whilst over one in 10 (12%) currently trying to save for a deposit have had to take on a second job to earn extra money.

Sacrifice and forfeit

Getting on the property ladder requires sacrifice and dedication. Almost one in five (18%) first time buyers say they are under pressure from their family to buy, while a further 18%

say they are feeling the pressure from their partner. In order to save for the deposit, first time buyers are also making a series of sacrifices. Nearly one in three (30%) have cut back on eating out, almost a quarter (23%) have cut out holidays while over one in five (21%) have been working longer hours.

Calling for change

When asked what could be done to improve the lot for first time buyers, the key request is to address rising house prices (46%). For two in five (39%), an extension of the Government’s Help to Buy schemes would be gratefully received whilst 30% just want to see the whole house buying process simplified. For 37% of those who are self-employed, introducing better mortgage products is key, as well as adapting the criteria for self-employed borrowers (33%).

Getting on the housing ladder

For more than a third (35%) of respondents, the main hurdle to getting the keys to their own home is raising a deposit, (slightly down from 39% in Q4 20162), and a quarter (26%) of first time buyers will rely on their parents for help – this remains on a level with Q4 2016 (27%). Concern around mortgage affordability (10%) has increased from Q4 last year (6%). Of those who have recently bought[2], the main problem experienced by almost one in five (18%) was saving enough for a deposit, whilst one in ten (10%) found the whole process very difficult. The number of those who will be joining forces with their partner in order to fund their deposit has risen to 45% from 38% in the last quarter, meaning the number of people buying with their partner has also increased considerably from Q4 2016, from 45% to 64%.

Charles McDowell, Aldermore’s Commercial Director, Mortgages, says: “First time buyers are the driving force of the property market but our Index reveals just how hard it is for them to get on the ladder, even more so for those who are self-employed. Low levels of confidence amongst these groups will have ramifications further up the housing chain so it’s imperative that more is done to support both segments of our society, paticularly with levels of self-employment continuing to rise in the UK.

“Raising a deposit is something that continues to be cited as the biggest hurdle by first time buyers, with a large proportion unable to do so without family help. With recent data[3] showing house prices increasing by 2% in the month of February, there seems to be no let up for first time buyers who are having to stump up more savings up front. House prices are inevitably impacted by demand and supply and more needs to be done to address the latter.

“In the Housing White paper the Government stated it will focus on delivering the right type of housing in the right places through a new assessment of housing needs, and this is something we fully support to better provide for first time buyers.

Aldermore offers many products to help first time buyers who are struggling to gather a deposit, including the family guarantee mortgage and 95% mortgages for customers who have a smaller deposit. We always recommend customers to shop around to ensure they choose the best mortgage product for their needs.”

Aldermore takes a stand

First time buyers have a notoriously difficult time getting on the property ladder and for those who are self-employed, the issues escalate. This is why, following a review of its self-employed mortgage criteria, Aldermore has taken the decision to reduce the number of years accounts a self-employed borrower must provide when applying for a residential mortgage – from two years’ to one – taking in[4]to consideration profit retained within the business when assessing affordability. These changes will provide applicants with additional flexibility and support, helping them to purchase their first home.

New Requirements for self-employed borrowers:

  • Applications should be accompanied by, one year of accounts prepared by a suitably qualified accountant; accountant’s certificate, or SA302 and accompanying tax overview documents obtained from HMRC.
  • Unlike other lenders Aldermore will usually use the latest years’ figures rather than an average of the last two years when making the assessment, if net profit is level or rising.


For further information, journalists can contact:

Rachael Snelling, Aldermore

Phone:          0208 1853 102
Email:           Rachael.Snelling@aldermore.co.uk

Rozie Green, Lansons
Phone:          0207 566 9724
Email:            rozieg@lansons.com

Notes to Editors:

[1]   Research conducted by Opinium Research between 21 to 26 February 2017 amongst 1,502 potential FTBs and 502 actual FTBs. Our sample has been weighted to reflect a nationally representative audience

2 All figures, unless otherwise stated, are from YouGov Plc.  Total sample size for the survey was 1,193 All GB workers/ students who plan to buy their first home. Fieldwork was undertaken between 3rd - 9th June 2016.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Figures for employment status were based on an initial higher sample size of 8,891. Figures for those predicting the timescale for their first property purchase were based on an initial higher sample size of 5,618.

3 http://www.rightmove.co.uk/news/house-price-index

For further information about Aldermore, please review our  Notes to Editors page

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