Ryan FowlerNew research from Nottingham Building Society reveals that 22% of people in the UK, rising to 30% among those under 35, have started a side hustle alongside their existing job to increase their chances of securing a mortgage. Moreover, 36% of Brits, with 51% of those under 35, have abandoned their dreams of starting their own business due to concerns over how this might negatively impact their mortgage applications.
The data highlights a significant belief among 45% of respondents that not having a ‘traditional’ full-time job makes climbing the property ladder more challenging. This nationally representative survey underscores the need for mortgage lenders to adopt more flexible approaches that reflect the diverse ways people earn their living today.
The research indicates that 44% of people are considering ways to supplement their income to improve their mortgage prospects, showing the extent to which financial stability is linked to homeownership aspirations.
The trend is particularly stark among the younger demographic, where over eight in ten under 35s are either considering (55%) or have already embarked on (30%) a side hustle to enhance their mortgage approval chances.
However, the traditional mortgage market appears to be stifling entrepreneurial ambitions. More than half (51%) of respondents believe that a 9-5 job is seen as a better indicator of financial stability by lenders. Additionally, 47% feel that current mortgage criteria are biased towards those with full-time, traditional jobs.
This perception might have some basis in reality, as 21% of respondents have faced difficulties in obtaining a mortgage due to their non-traditional career paths. Of those, 38% had to go through extra steps to prove their financial capability, and yet, 19% were still rejected.
Praven Subbramoney, chief lending officer at Nottingham Building Society, said: “These findings reinforce an issue we are increasingly discussing with brokers – that traditional lending practices are not delivering for a large proportion of ordinary people across the UK today. We know that what was once considered the ‘normal’ route to homeownership via a 9-5 job simply isn’t how lots of people are living and working anymore.
“What really stands out is just how pronounced the trend is with younger people. Non-traditional paths to homeownership are increasingly becoming the norm and we know that brokers are keen for more flexible solutions to support clients who fall into this category. We are committed to supporting this cohort of borrowers to make the dream of homeownership something everyone can aspire to, regardless of where their income comes from.”
