Self certified mortgages are for people who are unable verify their income by producing a series of wage slips. For such people income may come from a variety of sources, or it may be that they, as self-employed, have not been trading long enough to have accounts for the required period. Another possibility is that they may have a low basic salary and achieve high income through commission, bonuses, dividends or a second income.



Self certification covers a wide range of people and the trend is increasing. The self certification mortgage market is currently booming.

Market research organisation Datamonitor report that around 55% of self certified customers are self-employed, and another 34% are contract workers, seasonal workers and agency staff. That makes 89% of people in the self-certified market who fall outside the traditional employed status due to the way they work or earn their income.

The report also suggests that around 13% of the workforce in the UK is self-employed, and that number was nearly 3.8 million at the end of 2006. This is the highest number of self-employed people ever known in the UK, and the trend is growing.

There are a number of reasons for this trend. Although the number of redundancies in the UK is on the decrease the total was still over 500,000 last year. The problem is that re-employment rates are running at 35-45%, and older workers particularly find it difficult to get new jobs, meaning that there are a lot of people looking at ways to earn income for themselves, and they start their own businesses.

Once in the self-employed bracket, most people don't return to being employed. A Self-Employed Index was recently introduced which suggests from research that the mood among UK's business owners is buoyant, with 60% feeling confident about business prospects for the next six months. Another third were said to be very confident about the same period. The number expecting increased turnover for the next twelve months was 47%.

The number of self certified borrowers is also influenced by people multiple jobs. The rise of house prices, the increase in mortgage rates, creeping inflation are all factors that mean that some workers are now holding two or even three jobs just to make up the income they need. For these people, proof of income can be awkward.

There are a number of others who make up the rest of the self certification marketplace. There are those on low basic salaries, but who earn large bonuses at different times throughout the year; directors who wish to keep their financial affairs private; high net worth individuals with complex income streams, for example, property developers.

This wide and varied group of people all have one thing in common: they have more complicated streams of income than someone paid a regular, sufficient salary. They cannot always be catered for by mainstream lenders. Mortgage brokers or advisors can usually help.

It is likely that this pattern of work will continue to develop, and the demand for certified mortgages will increase further. As the market continues to increase, so will the range of products available to consumers.