After several years of steady increases, the number of people working on zero hours contracts has plateaued.
Latest employment figures from the Office for National Statistics show that there were 901,000 people on zero hours contracts between October and December last year, little changed compared with a year earlier.
With a zero hours contract, employers offer work when it is needed, but there is no guarantee of regular income, which means wages can fluctuate from month to month.
This type of contract soared in popularity in the years following the financial crisis, as employers sought to reduce their costs. Zero hours contracts give businesses much greater flexibility as they don’t have to provide workers with a minimum number of working hours.
If you’re on a zero hours contract, this can make it harder to get a mortgage, as lenders usually want to see evidence of a steady income each month, so that they can be certain that mortgage payments will be paid.
However, given the large number of people on this type of contract in recent years, several lenders have changed their criteria so that they are able to offer mortgages to people in this position.
Policies will vary from lender to lender but provided you can show you’ve worked on a zero hours contract for 12 months or more, and your income has remained relatively stable over this period, you should have a good chance of being accepted for a mortgage.
Make sure you save all your payslips, so you can show how much you’ve earned every month, and also keep your P60’s. A P60 is an annual form provided by your employer summarising your total pay and deductions for the year. The more evidence you have to show that your income is consistent, the more likely lenders will look favourably on your mortgage application.
Number of people on zero-hours contracts stabilises