Contractors reassured over housing market slowdown

Contractors have emerged as about the only potential home-buyers to be insulated from discordant noises around the residential property market slowing.

In fact all “self-employed professionals” looking at buying a home “should not be disheartened” by gloomy data -- and analysis -- in a monthly house price index, says CMME.

The mortgage broker for independent workers gave the reassurance after a 0.8% sales drop, and a £7,000 price drop, was blamed by index author Rightmove on 2014’s buyer curbs.

In particular, would-be house buyers were said last month – when the drops occurred – to be “bumping up against tighter lending criteria,” introduced four years ago following the MMR.

But Jason Powell, the chief executive of CMME, said that for contractors planning to buy a home, “there are lenders out there who will consider more complex cases.”

Contractors are also unique as products tied to their freelance status allow them to secure AIPs using a multiple of their annualised contract rate, rather than three years of accounts.

And despite the negative implication in the index that the chunk of sellers cutting their asking prices is at its largest since 2011, Powell believes that this too has an upside for contractors.

“For those looking to move up the ladder this could be good news, as falling asking prices could proportionately benefit them,” he said.

“[However] with the average house sale taking 13 weeks from listing to completion, for those with complex incomes looking for a new home by Christmas, we'd urge them to start their mortgage hunt soon so that it doesn't delay their home ownership dreams.”

Earlier this month CMME advised that, due to the BoE’s recent move to set interest rates at their highest level since 2009, “many” mortgages would now increase in costs. 

Contractors with a tracker mortgage will definitely see the 0.25% increase reflected; those on a standard variable will need to check with their lender, while fixed-term mortgage-holders may notice a higher fee when they change mortgage, the broker said.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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