Does a Zero Hours Contract mean you can’t get a mortgage?

It’s not zero hope for zero hour workers

There’s a worrying trend for zero hours contracts (ZHC) which can leave workers in double jeopardy. There is the fear that they will not be offered any hours in the short term, plus the long term fear that with a ZHC you can’t plan for the future or buy your own home. And the facts show that getting a mortgage on a ZHC is tough – with seemingly inconsistent earnings patterns and no proof of guaranteed work in the future, many lenders simply take a ‘computer says no’ approach.

Zero hour contract workers typically face difficulty when applying for a mortgage because they do not have fixed contracted hours of employment and therefore fail to meet the underwriting criteria of some banks and building societies. Latest data from ONS for April 2016 to June 2016 revealed that more than a third (34.2%) of zero contract employees actually worked full time, with 41% having been with their employer for 2 years plus.

However, it’s not all bad news, Zero hours contract workers are entitled to annual leave, the National Minimum Wage and National Living Wage and pay for work-related travel in the same way as regular workers. And with the latest statistics (March 2017) showing that the number of workers on zero hours contracts has reached a record high at 910,000, mortgage lenders are starting to sit up and take notice of these facts.

One such organisation, Ipswich Building Society has amended its lending terms to allow creditworthy zero hour contract workers access to its range of mortgage products. It takes the personal situation and income circumstances of each applicant into account by applying its manual underwriting procedures to all mortgage applications, as opposed to the ’automatic’ underwriting approach. Zero hour workers need to have a minimum of 18 months history of working within their role and be able to supply their P60 and 3 month’s payslips along with our other standard supporting documents in order to be assessed for a loan. Never lose hope because there are loan programs, such as the Real Estate Private Money Loan Program, that can help you purchase the home of your dreams.

Richard Norrington, Chief Executive of Ipswich Building Society, says: “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.” ‘This change in lending criteria, effective from 1 st March 2017, is available across all products to direct applicants and selected brokers.

To find out more about this specific offer, you can read therelevant pages on Ipswich Building Society’s website: and You can also find more general information on ZHCs from the UK Gov site . Learn more about your working rights and entitlements via ACAS too

This post is in association with the Ipswich Building Society

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