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Unfortunately in the past, zero hour contract workers have found it very difficult to be able to secure themselves with a mortgage as they are unable to meet the lender criteria – as there is no guarantee of regular hours to be worked and therefore no fixed income for a lender to review. 

The Statistics

According to the office of national statistics, in 2016 more than 900,000 people in the UK held a zero hour contract. Almost 34% of them worked regular full time hours and 41% had been in the same employment for more than 2 years. In fact, 9% of them have been in the same employment for more than 10 years!

Nearly a fifth of zero hour contract workers are at the age of purchasing their first property, but they face being judged by the flexibility of their work contract and declined a mortgage.

The Mortgage Misfit No More!

Zero hour contract workers have long been considered one of the ‘Mortgage Misfits’. However Ipswich Building Society have very recently confirmed that as of the 1st March 2017 they have changed their lending criteria to be able to help zero hour contract workers to secure a mortgage!

They will be taking personal circumstances into account through a manual underwriting process rather than automatically hitting ‘computer says no’.  Ipswich Building Society have said:

“Zero hour contract workers have limited choices for mortgage borrowing. We are continuing to improve our products and introduce new programmes to help those who are creditworthy, yet marginalised by mainstream mortgage lenders. We believe that ‘mortgage misfits’, such as those who are on a zero hour contract and can demonstrate a consistent income, should have the same level of options and access to the mortgage market as any other applicant.”

What Do You Need To Be Able To Apply For A Mortgage On A Zero Hours Contract?

  • Evidence of the past 18 months of your employment history & a P60
  • 3 month’s worth of payslips
  • A letter from your employer estimating the minimum and maximum hours available for you to work per month can also be considered
  • The usual lending criteria applies also

This is such great news for those on zero hour contracts and its a highly important shift as more companies are recruiting via zero contracts and more workers are forced down this route.

If you are currently working on a zero hour contract have you previously had a mortgage declined in the past based on your contract and will this tempt you to re-apply?

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