Britain nears “mortgage tipping point” as 39 million adults say the market is not designed for people like them

• Nottingham Building Society warns that a “mortgage tipping point” is imminent and is calling on lenders, brokers and policymakers to act together to help the market adapt to the modern work schedule 
• More than a quarter (27%) of recent homebuyers say they have delayed, paused, dropped out of or decided against a mortgage application because of how they earn, rising to half (49%) of those who are self-employed and 70% of those with complex income and a recent life event*
• 70% of people say the mortgage market is not designed for people like them, with just a quarter (27%) believing that the application process is a level playing field 
• Two thirds (66%) say people with variable or irregular incomes are seen as higher-risk and find it harder to secure a mortgage
• 77% say paying rent on time every month should count as evidence they can afford mortgage repayments 

Britain may be approaching a “mortgage tipping point”, where the traditional ‘standard borrower’ no longer reflects how people live, work, and manage their money, warns Nottingham Building Society, as new consumer research reveals seven in ten people (70%) say the mortgage market is not designed for people like them. 

The research comes from Nottingham Building Society’s landmark report The Doorstep Divide, which surveyed over 2,000 UK adults and highlights the widening gap between the reality of modern financial lives and the traditional model of borrower with a steady salary, straightforward credit history, and uninterrupted earnings.  

The prospect of a mortgage tipping point is also recognised by brokers. A further survey of 500 UK mortgage brokers in October found that more than two-thirds (68.4%) believe borrowers with traditionally non-standard circumstances are likely to become the norm, with almost half (48.8%) expecting this shift within the next 12 months. A further 31% say these borrowers are already the norm, suggesting the industry must adapt quickly to reflect how people now live, work, and earn.

According to the ONS, around 4.6 million people in Britain are self-employed, with many others on contract work, juggle multiple income streams, have limited credit history or are dealing with the financial fallout of a life event.  

There is strong public support for a broader view of creditworthiness from lenders, with more than three quarters of consumers (77%) agreeing that someone who pays rent on time every month should be able to use this as evidence they can afford mortgage repayments and 59% say it is unfair for little or no credit history to make a mortgage harder to obtain where someone has not missed payments or had financial problems. 

However, just 27% believe that the mortgage application process is a level playing field and only a quarter (25%) of respondents think people with non-traditional incomes are treated fairly by lenders. 

With two thirds (66%) saying those with variable or irregular incomes are seen as higher-risk by lenders, the impact of the growing divide is already shaping decisions before a mortgage application is made, leading to hesitation, lower confidence, and decisions to delay or step away from homeownership altogether. Fewer than half of respondents (43%) felt confident about applying for a mortgage based on their current circumstances, and more than a quarter (27%) have delayed, paused, dropped out of or decided against applying because of how they earn. Among the self-employed, that rises to almost half (49%). 

Nottingham Building Society is calling on lenders, brokers and policymakers to act together to help the mortgage market adapt to accommodate people with less straightforward incomes get on the property ladder, from standardising how complex income is evidenced to using rental payment history in mortgage assessments.   

Lenders taking a more flexible approach could also strengthen consumer trust, the research finds 68% say lenders that adapt to real-life circumstances are more trustworthy than those relying only on standard rules and 44% say clear explanations of how decisions are made would make them more likely to trust a lender. 

Aaron Shinwell, Chief Lending Officer at Nottingham Building Society, said: “For many, owning a home is a life goal that is already hard to reach. Self-employment, contract work, multiple income streams, and career breaks are now a normal part of life for millions, yet too much of the mortgage market see this as unusual rather than the new normal.  As a result, people are not applying to mortgages at all because they assume to answer is no. That means people are missing out on owning a home not because they can’t afford it, but because they don’t believe the current system will understand them and their lifestyle. 

“We’ve already changed how we assess borrowers whose circumstances don’t fit a standard model. For self-employed and multi-income borrowers, we look at the wider picture, including day rates, multiple income sources, and recent earnings growth, rather than automatically defaulting to the lowest figure. Our dedicated underwriters also take the time to understand complex cases in full. 

“However, no single lender can close this gap alone, which is why, as part of publishing this report, we’ve set out a clear roadmap for the mortgage industry to address it together. We are asking lenders, brokers, and the wider industry to be clearer and more consistent about how complex income is assessed, give proper weight to rental history and work collectively to improve fair access for borrowers whose circumstances do not fit a standard model.” 

Sue Hayes, Chief Executive Officer at Nottingham Building Society said: "The mortgage market has changed, but too often lending criteria has not kept pace with modern day living. Life events such as divorce, bereavement, illness or changing careers are now part of many people's stories, yet borrowers in these circumstances can still find themselves overlooked. 

“As a mutual, our role is to look beyond the labels and understand the person behind the application. We believe that anyone with a workable route to homeownership deserves to be considered fairly. That's why we're bringing specialist expertise into mainstream lending and calling for a broader understanding of what a creditworthy customer looks like today.” 

Sarah Harrison, Chief Executive at the Building Societies Association, said: “The Building Societies Association's Think Again! campaign found that almost half (47%) of aspiring homeowners have never spoken to a lender or mortgage broker to check what options are available to them. Yet two-thirds (67%) said they would be able to buy a home sooner than they thought when shown options from building societies that require no or low deposits. 

“Nottingham Building Society's report reinforces why that gap in confidence exists, highlighting the barriers many creditworthy borrowers face. Building societies have shown that responsible lending and greater flexibility can go hand in hand, helping people with a wide range of non-standard circumstances take their first step onto the property ladder.” 

Nottingham Building Society is urging anyone whose income or credit history does not fit a standard pattern not to count themselves out. Speaking to a mortgage broker before deciding whether to apply can reveal options people did not know they had. The full Doorstep Divide report is available here.  

Recommendations 

The Doorstep Divide Report sets out six recommendations for lenders, brokers and policy makers to improve clarity, confidence and access for borrowers whose circumstances do not fit a traditional mould.  

1. Standardise how complex income is evidenced, giving self-employed, contract and multi-income borrowers greater certainty over what they need to provide.
2. Bring verified rental payment data into assessment, allowing a proven record of rent payments to support affordability.
3. Time-bound the weight of resolved adverse credit history, so that past financial difficulty that has been resolved does not affect applications indefinitely. 
4. Recognise overseas credit history and route-to-residency, supporting borrowers with limited UK credit files.
5. Tackle self-exclusion with pre-application clarity, helping people understand their options before deciding whether to apply.
6. Treat fair access as a Consumer Duty outcome, and measure, so firms can demonstrate how well they serve borrowers with non-standard circumstances.