A third of self-employed homeowners have increased their unsecured debt, and a quarter have deferred mortgage payments, according to research by The Mortgage Lender (TML).

The survey, carried out in March among 1,000 self-employed current and aspiring homeowners, revealed unsecured debts, including personal loans, credit cards, and overdrafts, have risen by an average of £2,312 over the last year.

A quarter (25%) said they had taken a mortgage payment deferral, 16% had taken a break of up to three months and 9% had deferred payments for between four and six months.

A further 81% of self-employed people in the UK kept up payments on their unsecured debt but 9% missed credit card payments, 5% reported an unpaid personal loan and 8% failed to keep up payments on other debts.

A deterioration in their finances meant that 55% felt they would not be able to borrow the amount they currently owe on their mortgage if it was based on their last year’s earnings.

Steve Griffiths, sales and product director at The Mortgage Lender, said: “The last year has been hard for everyone but the self-employed feel as if they have been disproportionately hit by the pandemic increasing personal debt and deferring mortgage payments just to get by.

“Nearly 60% of the people we asked felt their experience of the pandemic was worse than an employee and the majority didn’t receive any financial support from the government.

“Nevertheless, there are millions of self-employed people contributing to the economy and the economic recovery.

“It’s vitally important there is a thriving, competitive specialist mortgage sector that is able to provide criteria and products that meet the needs of this segment of the population to prevent them from being locked out of the housing market or trapped in a home that no longer meets their needs.

“When we launched our residential range earlier this year it was with people like the self-employed, those with complex income and credit impairment in mind.”