We’ve heard of blanket bans on self-employed contractors in the context of IR35. But its not just hirers who have this policy; some landlords and letting agencies are also opting to prohibit freelancers from applying to rent their properties.
We’ve heard of blanket bans on self-employed contractors in the context of IR35. But its not just hirers who have this policy; some landlords and letting agencies are also opting to prohibit freelancers from applying to rent their properties.
This is by no means a new practice. But, in today’s overheating lettings market, requirements for ‘employed applicants only’ and other similar obstacles mean that, when it comes to finding a place to live, freelancers have even slimmer pickings than most.
As reported this week in the Financial Times, a boom in demand for tenancies has seen the cost of annual rents soar nationwide, including increases in excess of 12.5% in Manchester, Glasgow and London – all of which happen to be hubs for self-employment, particularly in the creative industries.
The factors driving this spike in demand for lets are many – but the single, inevitable consequence is ferocious competition among renters for places to live; this also gives landlords licence to be more selective about who they ultimately let a property to.
Naturally, one of the first things a landlord or letting agent wants to check is that a prospective tenant can prove their income. Unfortunately for freelancers, ‘proof of income’ can often be equated with ‘proof of regular employment’.
Banning self-employed applicants is towards the extreme end of the difficulties freelancers can face.
Where they can apply, they can be met with requests for self-assessment returns stretching back as far as three years (compared to the typical three months for employees), demands for more rent up front, and provision of a guarantor (who themselves can be subject to requirements – such as not being self-employed!)
These and other additional administrative burdens can mean that, by the time freelancers have gathered and provided the particular evidence an agent wants, the property has already gone – or increased in price due to bidding wars between applicants.
IPSE has previously spoken out against the needlessly burdensome and costly hoops the self-employed can be made to jump though when trying to get a mortgage. And, as we said then, we believe the way that someone chooses to work and earn a living should not limit their choices in life – and certainly not to live within a feasible distance of work.
It would seem that the bias against self-employed professionals is based, at least partially, on outdated assumptions – after all, self-employment is not a niche occupation and hasn’t been for quite some time; it is a large, and growing, sector of the economy numbering 4.3 million people, more than half of whom have worked in this way for over a decade – that’s longer than this employee has even been in the workforce.
If the experience of bias against the self-employed in the rental market resonates with you, we’re eager to hear your story – share it with us by completing the form below.
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