28% of adults with non-typical income streams, including those who are self-employed, freelance, or work on zero-hours contracts, have had a mortgage application rejected by a lender, according to new research from The Mortgage Lender (TML).

Examining the breakdown of employment types, those on zero hours contracts have the biggest rejection rates, with 46% having had a mortgage application denied. Freelancers come second, with 29% having been rejected by a lender, followed by 10% of self-employed people.

For those who have a complex income, it can be more difficult to get a mortgage because borrowers are perceived to be a higher risk to lend to than those who are paid under a traditional employment contract. While more than a quarter of this group have been denied a mortgage in the past, 26% of those reapplied.

Looking at reasons why those with complex incomes were rejected for a mortgage, 13% said it was because of no proof of deposit. A further 12% said a lack of mortgage guarantor was the reason, while the same number said they were denied a mortgage as a result of them making too many credit applications.

Other reasons include not having bank statements for the last 3-6 months (10%), not having the last 3 months’ payslips and P60 form (10%), not having their tax return form SA302 (9%), not having a statement of two- or three-years’ accounts from an accountant (9%), a poor credit score (10%), and unused credit cards (10%).

Steve Griffiths, chief commercial officer at TML, said: “Getting a mortgage has traditionally been trickier for those who have a more complex income, such as being self-employed, owing to the fact they are viewed to have a less predictable income stream. But this doesn’t make them unmortgageable. The reality is, as we recuperate from the impacts of the pandemic, and now with the rising cost of living, high inflation and interest rates, affordability continues to be a top concern for those trying to reach their homeownership goals.

“Encouragingly, our research has found those with complex incomes have not been deterred from getting a mortgage, with many reapplying at a later stage. This does however highlight the importance of seeking advice from a mortgage broker and considering specialist lenders who can be instrumental in supporting those who thought it might not be possible to get a mortgage and give them the same access to opportunities to get on the property ladder as those on PAYE.”