As the new tax year begins, millions of self-employed workers are entering a natural planning window, reviewing income, tax liabilities and savings goals for the year ahead. For many, homeownership is part of that picture.
New research from Pepper Money‘s Specialist Lending Study (SLS), based on a survey of 4,000 UK adults, finds that 300,000 self-employed adults with adverse credit expect to be in a financial position to buy within the next three years. Yet despite that readiness, confidence in accessing a mortgage remains low, with many feeling locked out by the way their income is assessed.
Beyond those with adverse credit, demand is pronounced across the wider self-employed population, with 80% aspiring to homeownership – higher than both full-time (73%) and part-time employees (66%).
Self-employed borrowers face persistent barriers
The research reveals that 76% of all self-employed adults believe their employment status makes it harder to secure a mortgage, underlining the ongoing challenge of aligning non-traditional income with standard lending criteria.
At the same time, there are clear gaps in understanding the homebuying process. More than a third (36%) of all self-employed adults say they don’t know what size deposit they would need to purchase a property, highlighting a significant advice gap at an early stage of the journey.
Concerns about existing debt are also shaping confidence. Among those who became self-employed in the last three years, 81% say they’re worried their current level of debt could affect their chances of securing a mortgage, highlighting how financial uncertainty is compounding perceived barriers to homeownership.
A changing workforce reshaping borrowing needs
The findings come at a time when the UK workforce is evolving rapidly. Increasing numbers of adults are now earning through self-employment, contracting or multiple income streams, reflecting a long-term structural shift in how people work and manage their finances.
The shift is also influencing housing decisions more broadly. Of UK adults considering downsizing to reduce housing costs, 46% are self-employed within the last three years, suggesting that newer self-employed workers are increasingly adjusting their housing expectations in response to financial pressure.
However, mortgage processes haven’t always kept pace. Many self-employed borrowers still find it difficult to evidence income in a way that fits traditional underwriting models, even where they are financially stable and able to meet repayments. This is creating a growing group of customers who are financially capable but underserved by high street lending criteria.
Specialist lending supporting new routes to homeownership
Self-employed borrowers often struggle to meet the income evidence requirements of mainstream lenders. Without a regular payslip, demonstrating consistent earnings can be difficult, even where underlying finances are solid. For those who also carry adverse credit, the barriers compound further: high street lenders are typically unwilling to look beyond the credit file to assess the full picture. That’s where specialist lenders like Pepper Money can provide routes onto the housing ladder which may otherwise have been closed.
The SLS also points to a broader rise in adverse credit across the UK. This year’s study found that 30% of UK adults, equivalent to 16.6 million people, have experienced adverse credit at some point in their lives, up from 15.3 million the previous year and the highest figure since the study began. Economic pressures continue to push more people toward missed payments and debt.
The study reinforces the role of specialist lenders and brokers in supporting self-employed borrowers by taking a more flexible and holistic view of income and affordability.
Commenting on the findings, Paul Adams, Sales Director at Pepper Money, said: “The start of the tax year is often the moment when many self-employed people take stock of where they are financially and start thinking seriously about their financial goals, including homeownership.
What this research makes clear is that aspiration isn’t the problem – this is telling at a time when confidence is low in other parts of the market. Self-employed customers are often financially resilient, but their income can be harder to assess through standard lending models. That’s where specialist lenders and brokers play a vital role, helping to build a clearer picture of affordability and opening access to homeownership in financially sustainable and responsible ways. As the workforce continues to change and financial lives become more varied, it’s important the mortgage market keeps pace to reflect that reality.”
