Paul Huxter - Head of Intermediary Sales and Distribution

Go back 40 years. You’d find young people flocking into the corporate workspace, ready to start their ascent up the career ladder. One company, one salary, one clear path of progression. Meanwhile, this all happened within 20 miles from where they were born.

The world has changed leaps and bounds since. Today, it’s rare to see young people commit 5+ years to a single company. Instead, many are choosing unconventional employment structures or doing their own thing altogether. Skilled workers from around the globe have also supplemented the UK workforce. Others have arrived for study- or family-related reasons.

Then just a few years ago, Covid accelerated a shift that was already underway. It gave many the impetus to quit the 9-5. The cost-of-living crisis followed and pushed even more people to pursue additional income streams. The result of it all? A noticeably different landscape with more untraditional incomes and a higher diversity of people… and a high street still stuck in the 80s.

Statistics back this up. According to Sage, around 47% of the UK population have a second income stream. And 7 in 10 young people hold more than one income stream. This includes freelancing, rental income, dividends, gig work, online businesses, and investment returns, among others. Most of these are now more accessible and mainstream than they have ever been.

In the end, it’s evident that the way people generate income is changing. As long as the high street keeps excluding people based on irregular income, or only consider their salary income, the more they leave the door open for specialist lenders to fill the gap.

Foreign nationals also tend to have a difficult time obtaining a mortgage. A recent study by Afin Bank showed that some non-EU nationals face up to a 90% rejection rate. Visa-related reasons and limited credit history are among the main factors.

EU-citizens without settled or pre-settled status also face barriers when applying for a mortgage. Among foreign nationals, a lack of or limited UK credit history is a major factor precluding them from a mortgage offer.

There’s clearly a growing number of irregular income earners and more foreign-born UK residents than ever before. So, it’s high time that the industry re-evaluates how it serves these applicants.

Traditional affordability assessments no longer reflect the financial reality of a growing number of borrowers. Many of these are still focused on salaried, full-time employment and long-standing credit records. Brokers must become more comfortable with diverse income structures and varied personal circumstances. This includes self-employed/multi-income applicants and foreign nationals with limited UK credit history.

The scale of referral opportunity becomes clear when examining the numbers. Approximately 4.4 million self-employed workers and 4.5 million non-UK nationals currently work in the UK. They collectively represent 20-25% of the workforce. Yet specialist lenders currently handle only around 10% of total mortgage lending.

This suggests there's far more opportunity to refer complex cases to specialist lenders than many brokers realise. A significant portion of the underserved population are still turning to high street banks only to face rejection or unfavourable terms.

Specialist lenders like West One are already rising to the challenge by adapting faster than the high street, embracing case-by-case underwriting, readily accepting foreign nationals, and viewing complex income holistically.

For brokers, this presents a real opportunity. Partnering with flexible, forward-thinking lenders equips them to serve modern borrowers. They will be the ones best placed to grow as market complexity increases.