Some 85% of self-employed workers in the UK say their incomes have not bounced back to pre-pandemic levels, resulting in a majority of them abandoning hopes of moving onto or up the property ladder, according to The Mortgage Lender.

The specialist lender’s survey revealed 28% of self-employed people have seen their incomes slashed by more than half over the last year because of the pandemic. 

A further 16 per cent said they had seen their salaries cut by between a quarter and a half. 

As a result, 51% believe it is now more difficult for self-employed borrowers to get a mortgage. 

A further 53% claim that their self-employed status has deterred them from even applying for a home loan.

There are 4.4m self-employed workers in the UK, according to the latest Office for National Statistics data released in May.

But The Mortgage Lender survey also showed that some self-employed workers bucked income trends during the pandemic.

Around 18% of these workers hadn’t experienced any change to their income, and 14% said their pay had increased during the health crisis.

The Mortgage Lender sales and product director Steve Griffiths says: “When we launched our new residential range earlier in the year we did so with the self-employed, complex income borrowers and credit impairment front of mind, because these are the people who have been most affected by the pandemic.

“Even before the pandemic self-employed people felt let down by the mortgage market.

“In 2018, as part of a special report called ‘The Self-Employed Economy,’ we found that one million [or 21%] self-employed people had reconsidered their employment situation because of the uncertainty of securing a mortgage. 

“Today, the statistics show even more pessimism, with over half believing their chances of being given a mortgage are so slim they don’t even think it’s worth applying.

“Now more than ever specialist lenders need to have criteria that caters for a wide range of customer circumstances and recognise that the last 12 months has been financially difficult for many people.”

The Mortgage Lender surveyed 1,000 UK-based self-employed workers in March, who either own their home or said they want to.

In April, the firm launched its Lumi-branded residential mortgage products, aimed at employed and self-employed borrowers and people with complex income who may have defaults, county court judgements against them and arrears in their financial history.  

At launch, the new products were available at up to 75% loan to value with rates for a two-year fix starting at 4.98% and, at 70% LTV, 5.29 per cent for a five-year fix.

The minimum loan was set at £25,001 with the maximum at £1m.