Self-employed remain confident about business prospects
20 November 2007
An autumn of economic volatility across the globe has impacted on the expectations of the UK’s 3.6 million self-employed workers, but it hasn’t dented their confidence, according to the latest Kensington Self-Employed Index.
The Index, commissioned by specialist prime and adverse credit mortgage lender Kensington, has found that even though only 42% of business owners expect to see an increase in turnover over the next 12 months, down from 48% in May, two-thirds (66%) say they are “very confident” or “quite confident” about their business prospects for the next six months – a figure that is up from the first two quarters of the year.
With the latest statistics from Datamonitor estimating the UK’s self-employed population to account for more than 3.6 million people, this means more than 2.4 million business owners continue to be confident about their financial prospects amidst an environment of global economic uncertainty.
The most bullish age bracket is those business owners aged between 35 and 44, with nearly three-quarters (74%) expressing confidence about their prospects, while it seems that having a partner is also important to the mood of the self-employed. A third (33%) of business owners who are married or living as married claimed to be “very confident” about their prospects, compared to just over a fifth (22%) of self-employed people who are not married.
Yet, despite the prevailing mood of confidence, the current economic environment has impacted on the way in which the self-employed run their business and lower expectations for turnover have had a knock-on effect on recruitment plans. The Kensington Self-Employed Index has found that more than six in 10 (61%) business owners say they definitely have no plans to recruit more staff in the next 12 months, a rise of 6% on last quarter. And within this group, it is the female section of the self-employed population who are by far the more conservative, with 67% of female business owners saying they definitely have no plans to recruit more staff, compared to just 58% of males.
These findings have been collected as part of the fourth instalment of Kensington’s Self-Employed Index, which has been launched to track the mood, expectations and behaviour of the self-employed with research carried out and published every quarter.
The research for this quarter’s Index was carried out by talking to more than 500 self-employed people. It found that 69% of the self-employed population is male and the most popular age group for people to be self-employed is between 35 and 54. Two thirds of business owners are in the ABC1 social grade (66%), and 70% are either married or living as married.
Kensington Mortgages has 12 years’ experience of lending to the self-employed so it really understands the needs and circumstances of people who own their own business. And, with its range of Prime Self-Cert products, all self-employed borrowers can benefit from criteria such as no minimum trading period, no income verification required and maximum 90% LTV.
Ian Giles, Director of Marketing at Kensington Mortgages, said: “Of course, the challenges faced by the mortgage market are well documented but the Kensington Self-Employed Index shows that business owners are reacting pragmatically to the current economic environment by reassessing expectations for turnover and recruitment. But when circumstances change, successful businesses are able to react to those circumstances and come back stronger than ever before, so it’s not surprising that so many self-employed people remain confident about their business prospects for the future.
“A strong self-employed sector is good news for the country and great news for mortgage intermediaries, as these individuals will often have specialist circumstances and require sound financial advice to help match them with the right product from the right lender and ensure they can be as confident in their mortgage as they are in their business.”
