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Self-employed workers optimistic about home buying prospects

Self-employed workers optimistic about home buying prospects
Samantha Partington
Written By:
Posted:
January 14, 2025
Updated:
January 14, 2025

Self-employed workers are optimistic about their chances of buying a property within the next five years as expectations of a rise in earnings and lower interest rates and inflation boost confidence.

Almost 80% of self-employed workers, such as freelancers, self-employed individuals, and gig economy workers, plan to buy a home in the future.

A survey carried out by The Mortgage Lender (TML) found that within this group, 22% have plans to buy their first home, while 14% are aiming to become a landlord and 11% plan to buy their second home. A further 9% plan to either sell their property or downsize.

Of those with plans, 73% of non-traditional workers are optimistic about achieving their homeownership plans in the next five years, with almost a third saying they are very optimistic and over two-fifths saying they are somewhat optimistic.

 

Why are self-employed borrowers optimistic about buying a home?

The younger generations of self-employed borrowers were the most optimistic, with 84% of 18-24-year-olds being optimistic about their property plans in comparison to 78% of 25-34-year-olds and 70% of 35-44-year-olds.

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When asked for the reasons behind this optimism, a third said that it was because their earnings were set to increase, and the same number said they were feeling positive because they were already on the way to achieving their plans. Similarly, 33% said it was because they would have saved enough for their deposit in that period.

Economic stability was also a major factor in feeling optimistic about buying a home.

Almost a quarter of self-employed respondents said they thought interest rates would come down and 17% thought inflation, which currently stands at 2.6%, would continue to come down or stay low.

Some 16% of those surveyed thought the housing market was stable and 12% were optimistic because of the government’s plans to build one-and-a-half million new homes in the next five years.

 

Cost of living eats into self-employed savings

Not all non-PAYE workers were feeling positive about their prospects of homeownership.

A quarter revealed they were not optimistic about achieving their homeownership plans in the next five years, and of this group, over half said this was because the cost of living had meant they had needed to use their savings and income elsewhere.

Meanwhile, 36% shared that the property in the area they want to buy or rent in was too expensive and 33% have not yet built up their deposit.

Economic factors also had an impact on optimism, with 20% thinking that tax increases will make it harder to achieve their goals, 15% saying that they don’t think interest rates will be low enough for them to afford a mortgage, and 10% claiming that stamp duty is too high.

A recent survey from the Bank of England and Ipsos painted a similar picture. It found that a third of people believed interest rates will be higher in 12 months’ time.

Sara Palmer (pictured), distribution director at TML, said: “Whilst the hurdles to homeownership can be especially high for non-traditional workers, it’s encouraging to see that so many members of this group are still keen to pursue their homeownership plans. This is a testament to their resilience, and as lenders, we must recognise this ambition and ensure we’re aligning our product offerings to match.

“At TML, we’re keen to support non-PAYE workers through real-life lending, which means working closely with brokers and regularly reviewing our criteria to best help people achieve their property ownership goals.”