Supporting brokers to serve mortgage applicants in the gig economy era – Mulle

Most people change jobs every 3-5 years, and some completely change careers mid-life. Among those in their 20s and 30s, it’s even more common to chop and change, with younger generations increasingly likely to freelance, working here and there often for multiple employers.

This so-called gig economy in the UK is estimated to include just under half a million people, according to the Chartered Institute of Personnel and Development.

Along with 50,000 private hire drivers and food delivery drivers in England and Wales, there are also a quarter of a million people doing desk-based services, such as web development or translation and legal services, through apps and websites. Nearly 100,000 people undertake cleaning, decorating, plumbing, electrical work, dog walking or other manual tasks, earning wages ‘ad hoc’ rather than being salaried. 

But what does this mean for those coming from a non-traditional employment background that want to apply for their first mortgage? 

Sponsored

Shawbrook is the specialist mortgage sector’s ‘best kept secret’ – Sard

Sponsored by Shawbrook Bank

The tough climb on the property ladder 

It is more difficult than ever to get onto the housing ladder, with the latest data from the Office for National Statistics (ONS) showing just how acute affordability challenges are. 

During the financial year ending April 2023, the average annual disposable household income was between £29,800 and £35,000 in England, while the average house price was £298,000 – a ratio of 8.6:1. Over the same period, the average house price to disposable household income ratios were 5.8:1 in Wales, 5.6:1 in Scotland and 5:1 in Northern Ireland, as house prices there have not risen as fast.

In this context, it’s hard for first-time buyers even when they do have a stable income from a single employer. For those in the gig economy, it’s sometimes impossible. 

It’s not just first-time buyers either. With many borrowers facing income shortfalls when they retire, it’s increasingly common to have a gig on the side after giving up work full-time. These older gig workers also have mortgages to pay off and face complex application problems. 

Gig economy workers pay the price for slow legacy systems 

Legacy systems and rigid underwriting processes mean too many potential buyers are slipping through the cracks. Brokers see this daily, frustrated by their inability to help. While digital innovation is transforming banking and lending, 75% of banks still struggle with outdated infrastructure, delaying much-needed progress.

The shift to advanced, cloud-based platforms must happen now. To compete in this evolving market, lenders need flexible systems that can quickly adapt to change, integrate new data sources, and support diverse lending policies.

Aligning data and underwriting processes isn’t just a competitive advantage – it’s essential for ensuring more consumers get access to the financial solutions they need. 

Lenders must act now 

Supporting this new demographic of buyers and their brokers is not just a growth opportunity, it’s a market that all lenders are looking at. Not finding ways to lend to them risks losing market share to the competition who can.