Can I get a mortgage on a zero hours contract?
The gig economy is huge whether it be buying a Big Mac, ordering a Domino’s Pizza, or getting your next Amazon delivery. We might not have a job working in the gig economy but we are all aware of it.
Those that work in the gig economy generally have one thing in common and that’s that there are on a zero-hours contract. According to the ONS employer survey, 2 sectors account for more than half of all UK zero-hours contracts. The first is accommodation, which includes hotels, restaurants and catering and events. The other big user is the administrative and support services. That covers a wide range of activities including cleaning and office support.
But what is a zero-hours contract?
Put simply this is a type of employment contract between an employer and an employee with the employer is not obliged to provide any minimum number of working hours to the employee.
Now that we have got our heads around what a zero-hours contract is, the next question to ask is can I get a mortgage based upon a zero-hours contract?
The answer to that question is a qualified yes and as with all mortgage enquiries it comes down to sustainability.
A lot of the High Street lenders are happy to look at the circumstances of the zero-hours worker but it is clear from my investigations that sustainability and consistency are the keys to success when it comes to securing a mortgage.
You are going to give yourself the best possible opportunity by having at least 12 months of continuous income without any breaks. That is pretty much the gold standard that you will need. Some lenders require you to have had a previous three-year track record but the likes of Nationwide Building Society and Halifax are happy to look at your 12-month record.
The lenders will certainly dig a little bit deeper into how sustainable your contract is. So if you are able to establish that you have been doing a zero-hours contract for a long period of time then it follows that there is some sustainability in your job notwithstanding the fact that there is no guarantee of work.
As far as affordability is concerned, the lenders will look at the last 12 months and use this figure to calculate how much they are prepared to lend to you.
So there you have it, it’s all about track record and sustainability. If you can combine both of those then you should be able to find one of the High Street lenders who will be prepared to talk to you.
Good luck and if you need a helping hand and a steer in the right direction and give me a call.