Is this the end of self-cert mortgages for UK sole traders?

Date: 15th July 2010

A number of sole traders operating in the UK could be forced to prove their earnings when applying for a mortgage under new proposals made by the Financial Services Authority (FSA).

Earlier this week, the FSA published a report outlining a series of proposals to improve the UK's mortgage system.

Included in the report were plans to make all borrowers take an "affordability test", have income verified in all mortgage cases and introduce extra protection for "vulnerable" customers.

The recommendations come after the FSA revealed that almost half of the mortgages granted between 2007 and 2010 were obtained with no verification of customer earnings.

Lesley Titcomb, FSA director responsible for the mortgage market, said: "There is a clear link between financial overstretch and mortgage arrears and repossessions, and we are determined to protect vulnerable consumers by making sure that everyone who takes on a mortgage can afford to pay it back."

Posted by Thomas Fletcher