The self-employed are selling “selling themselves short” when it comes to the prospect of homeownership, according to specialist lender Together.

Research from the firm revealed that more than a third of would-be homeowners have already judged themselves “unworthy of a mortgage”, as they decided against submitting a mortgage application because they expected it to be rejected.

According to the data, self-employed borrowers – who account for 15 per cent of the UK workforce, the equivalent of 4.8 million people – are being put off before even applying for a mortgage or remortgage as they stress over strict rules on proof of earning at high-street lenders.

However, Together claimed the self-employed have grounds for cations. Its research highlighted that around 21 per cent of self-employed borrowers who have applied have been rejected, with a fifth of them being turned down more than four times.

The main reasons for being rejected by high-street lenders cited by one in four self-employed borrowers were; a lack of recent tax returns; irregular or insufficient income; and the mortgage requested being too large.

In addition to this, one in five (20 per cent) of those self-employed said they were denied a mortgage because they did not have enough proof of future earnings.

Commenting, Together personal finance CEO Pete Ball said: “These findings are understandable, but the fact that so many people are doing themselves out of owning their own home because they expect rejection is very worrying.

“The way people live and work has changed enormously over the past few years, and it doesn’t make sense for the mortgage market effectively to lock out such a large group as the self-employed simply because of the way they earn a living.

“It therefore requires lenders to invest time and develop experience in understanding applicants’ circumstances in order to be able to help them. Providers have, quite rightly, to ensure that mortgages are affordable for borrowers, but that should not be done at the expense of making it harder for the self-employed. There are signs of improvement across the market but greater flexibility is needed.”

Furthermore, two-thirds of self-employed workers have found the process so troublesome they have considered switching to the security of a directly employed role to increase their application chances.

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