Self-employed property hotspots revealed: Where does your region rank?.

According to ONS data, the UK’s 4.4 million self-employed people are sitting on an incredible £81.5 billion worth of disposable income. That’s enough to fund the average first time buyer deposit 1.6 million times over. 

In this blog, we reveal the top five regions in the UK according to self-employed disposable income, the surprising city topping the list with £802 million, and why self-employed people are still struggling to get a mortgage. 

Top five self-employed property hotspots by region

London, unsurprisingly, leads the way with almost £21 billion of disposable income spread between the capital’s self-employed population. In fact, their combined disposable income has grown by 32.8% in the region over the last ten years, outpacing the national average of 26% growth.

At the other end of the scale, the self-employed individuals in the North West share an estimated £5.7 billion, a figure that has shrunk by 7.3% in the last five years.

The UK regions have seen a considerable growth in wealth created by self-employed workers, which could be reinvested into the local housing markets.

However, the growing combined bank balance doesn’t necessarily mean individuals can invest in bricks and mortar, especially with rising house prices, housing shortages, and banking criteria working against self-employed home buyers.

Top five cities with the largest self-employed disposable income

In the battle of the B’s, Bristol surprisingly beats out Birmingham with a combined disposable income of £802 million, growing by almost a quarter in the last five years.

It was the ‘bees’ of Manchester who saw the biggest increase over both a five year (57.7%) and ten year (70.7%) period though, accumulating a combined £625 million.

The self-employed community in Brighton and Hove saw their shared wealth fall by nearly 30% in the last five years, down to £337 million.

Despite ranking highly on disposable income, many of these cities are also listed on the areas with the worst housing shortages in the UK. Expensive cities to live in such as Bristol and Brighton build far less housing than other cities that have cheaper housing and lower demand, driving up competition.

Birmingham’s housing crisis is set to worsen over the next 15 years as experts say the city needs to build 127,600 new houses before 2040 to meet demand. This is down to the city having the youngest population in Europe with 40% of residents under the age of 25 – a demographic that is likely to want to own their own homes in the future and with a growing number of self-employed workers.

What Together has found…

Our own research found that the self-employed aim to save an average deposit of £51,000 towards a new home, with one in five looking to buy property in the next 12 months.

However, the survey also reveals that four in five self-employed people feel that mortgage lending criteria is stacked against them, with 87% of those surveyed agreeing that their work status made it ‘much harder’ to get a home loan. 

High rejection rates and other long-standing mortgage issues amongst self-employed applicants have led many to believe that property ownership is no longer an option. It’s a problem that has left many self-employed people (82%) deliberating whether to continue working for themselves altogether.

But does it need to be this way?

When we spoke to Ryan Etchells, our Chief Commercial Officer at Together, he said, “The country’s self-employed workers are crying out for lenders to support their home-owning ambitions.

In a lot of cases, despite holding an average deposit of £51,000 saved for a new home, self-employed customers still contend with major issues, financial prejudices and a lack of understanding of their incomes and finance needs from mainstream banks. 

In economically tough times, lending appetites for mortgage applications considered ‘complex’ dwindle to almost nothing, which we would say is unfair when it comes to the nation’s self-employed wealth creators.

Specialist lenders can offer bespoke underwriting to get to know the borrower’s individual circumstances. It would be fantastic to see other lenders following suit, providing the same level of support for this large but underserved section of the UK’s workforce.” 

As you can see, the appetite and ability to own is very much alive in the self-employed community – from gig workers to company owners – but there are still unnecessary barriers in place when it comes to borrowing that prevents them from achieving their property ambitions.

At Together, we’re able to look at each case using a common-sense approach. When self-employed customers ask us for help, we’re able to take their often complex or multiple incomes into account when looking at their affordability, and we don’t just judge on strict criteria.

If you’re having issues getting your mortgage approved, have a chat with our team to see if we could help make your property ambitions a reality.