Mortgages For Zero Hours Contractors

Zero Hours Contract Mortgages Blog

‘A zero hours contract is a contract between employer and employee where the employee is under no obligation to work a minimum number of hours nor do they have to accept any work offered.’- ACAS

Zero hours contracts (ZHCs) offer many benefits to workers and employers – flexibility being the main one. However, they can cause problems when someone on a ZHC is looking for a mortgage. They are not guaranteed any hours each week – so the regular, dependable income that lenders are so keen to see is not available.

As of May 2017, according to the Office for National Statistics, there were an estimated 950,000 people in the UK working on a ZHC basis and this figure is only predicted to continue to rise. Although some lenders refuse to lend to borrowers on this type of contract, many are recognising that the ZHC phenomenon is simply part of a change in the way we work, and are now considering applications based on ZHCs.

We all know that lenders like a safe bet. Financial stability gives them confidence that repayments will be consistently met every month. On the face of it, ZHCs do not give the borrower the ability to meet this criteria. But the statistics show that often, the picture is actually very different. Many people on ZHCs have been with the same employer for over two years, and a third of them do in fact work full time hours.

These workers are unquestionably exhibiting the kind of stable employment status that mortgage lenders love to see. This is why more forward thinking mortgage providers are now willing to accept applications from people on ZHCs on a case by case basis.

What Does This Mean For My Mortgage?

The mass adoption of ZHC’s in many industries suggests that this trend is going to continue to rise in the future. That fact is changing the way that banks and building societies regard this form of employment. It is no longer considered a stigma but a reality which can be both financially stable while allowing employees flexibility to change jobs quickly or alter their working week to the needs of their circumstances.

Check List

To get a mortgage on a ZHC, you will need a few pieces of evidence to hand before going before a lender.

  1. You need to have spent 12 months in your current position
  2. You need to provide payslips for those 12 months
  3. You need to provide three months worth of personal bank statements
  4. You need proof of deposit for your property

How Do I Ensure I’ll Be Accepted?

Whereas a ZHC once precluded access to mortgages and other forms of borrowing, mortgage lenders such as the Ipswich Building Society are adapting to these new realities and offering mortgage opportunities that allow people to gain that vital foothold on the property market.

Requirements vary lender to lender but there are a handful of lenders out there which will consider an application if the borrower has less than 12 months’ experience as a zero-hour contractor, so don’t panic, but do bear in mind that options will be restricted.

As far as pricing goes, I think you will be pleasantly surprised to know that the lenders which accept applicants on zero-hour contracts do not penalise. You will have access to the same rates you would if you were employed, so no nasty shocks when it comes to pricing!


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