More than nine in 10 brokers (91%) believe that mainstream mortgage lenders have tightened their criteria for self-employed applicants, according to a new study.

Research by United Trust Bank (UTB) revealed that eight in 10 brokers (81%) also believe that clients’ incomes have become more complex over the last 12 months.

The findings were published in a new white paper from UTB, titled Growing opportunities for brokers in the specialist mortgage market, and were formed from an independent survey of over 100 mortgage brokers.

It also found that 88% of brokers believe that self-employed customers, specifically those who took advantage of legitimate COVID grants, are being marginalised by mainstream lenders.

Brokers indicated that many lenders had struggled to “take a view” on clients who had used a legitimate government grant. UTB said its study also showed that brokers felt they should have been able to apply an objective assessment of the impact that the lockdowns had had on certain, previously successful businesses.

UTB director of mortgages, Buster Tolfree, who commissioned the white paper said that many applicants no longer fit traditional “tick-box” criteria and that this group is “only going to get bigger”.

“The way people earn their income or incomes has and will continue to change,” Tolfree commented.

“As such, income criteria will be an increasingly important factor for brokers when choosing where to place their cases. Although many applications will require the skills and judgement of an experienced professional to properly assess suitability, that same knowledge and flexibility can be applied when designing and managing auto-underwriting systems and criteria.

“The idea of being able to ‘take a view’ is more than simply having a human involved. It’s about the approach a lender takes to underwriting and in establishing criteria which recognise that incomes are no longer always singular and straightforward, credit histories aren’t always unblemished and some properties are more unusual than others.

“Automated or part automated application processes using time saving technology do not discriminate against specialist cases per se, as long as the system is designed to accommodate applicants with more complex circumstances.”

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