The Intermediary – September 2026 - Flipbook - Page 51
RESIDENTIAL
Opinion
Finally serving the
under-served
I
spend a lot of time talking
about under-served borrowers:
people who struggle to get a
mortgage from high street
lenders because they do not fit
neatly into their automated
boxes. But what you quickly realise
when talking to brokers and
customers is that the people that are
being let down by the big banks are no
longer outliers.
We are not talking about people
with adverse credit, which has
traditionally been the core of specialist
lending. Many are hardworking,
creditworthy borrowers who look
great on paper until their advisers try
to place them with a lender. That’s
when the trouble starts, because their
circumstances are deemed ‘nonstandard’, oen simply because of
factors relating to their income or the
way they work.
The other thing you discover is that
these people do not call themselves
non-standard borrowers or specialist
mortgage customers. They don’t even
realise they are being under-served.
They’re just trying to get a mortgage.
They are oen people whose
career path has taken them away
from the traditional salary-based
income model, such as the recently
self-employed, freelancers and
contractors, or people with mixed
income from their main job and a
side hustle.
Government figures show that
there were nearly 1.3 million people
with a second job in June this year,
accounting for almost 4% (3.8%) of all
people in employment. Research in
2024 by IPSE, the professional group
for freelancers, found that there were
more than 460,000 side-hustles,
20% higher than the previous year
and accounting for 11% of all solo
self-employment.
The shape of employment is
evolving, but it is causing issues for
mortgage borrowers who no longer
rely on a single fixed salary.
Research by Afin among the
self-employed found that 26% of
respondents believed they had been
turned down for a mortgage because
they were self-employed.
We also found that 23% believed
their fluctuating income had been an
issue, 13% believed that insufficient
proof of earnings or not enough years
of accounts had been a barrier, while
9% believed they had been turned
down because the lender would not
accept multiple income streams.
The rounded view
Afin’s roots lie in wanting to help
another group of under-served
customers: foreign nationals living
and working in the UK on a valid work
visa. Last year when we launched
with an initial focus on the African
diaspora in the UK, our research found
that 87% of Africans living in the UK
had been turned down for a mortgage,
with almost half (48%) believing
they were rejected because of their
visa status and nearly a third (30%)
believing the rejection was due to a
limited UK credit history.
Even the regulator acknowledges
that certain borrowers are underserved. In a consultation launched in
the summer, the Financial Conduct
Authority (FCA) proposed mortgage
rule changes that would give “lenders
the flexibility to take a rounded view
of someone’s finances – so they can
offer a mortgage that fits real people’s
real lives.”
The consultation includes proposals
aimed at improving access for people
with variable or irregular income,
self-employed borrowers, people
requiring interest-only or part-andpart solutions, people with foreign
currency income and people whose
circumstances don’t fit conventional
affordability models.
On the face of it this is good news for
borrowers, but we need to be careful
that mortgage rule changes do not just
result in bigger lenders cherry-picking
ANUM MAHMOOD
is national sales
director at Afin Bank
customers. We saw that when Afin
launched its proposition for foreign
nationals in the UK. Within a few
months, more lenders had adjusted
their criteria, accommodating more
foreign workers. However, there were
still large gaps for borrowers with thin
credit histories, limited time in the UK
or with gied deposits.
Brokers and customers still need
choice, value and good outcomes,
and that can only happen with a
competitive market. That’s why
smaller lenders play a vital role in
driving innovation and lending
solutions that respond to evolving
customer needs.
For example, Afin Bank is now
looking at how we can support other
customers who do not meet traditional
salary models, because some of their
income may come from sources such
as dividends or bonuses.
Other options could be helping
borrowers who want a bit more
flexibility with their mortgage
payments to support them as their
career and income changes, or to
manage affordability via part-andpart solutions.
Lenders must support the market by
helping more borrowers get the right
mortgage. But we can only do that by
talking to intermediaries, listening to
clients and adapting to the changing
needs of all borrowers.
If we don’t, then the number of
under-served borrowers will only
increase, and that could be damaging
for the market, intermediaries
and anyone wanting a home of
their own. ●
September 2026 | The Intermediary
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