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Since the pandemic, many employers have offered flexible ‘hybrid’ working plans which offer their employees the opportunity to work from home.

This has lessened the need for the commute and has often allowed more people to move to different locations yet perform and maintain the same level of work they have been used to doing.

But could this affect your mortgage?

The Office for National Statistics found that between October to December 2019 and January to March 2022 the number of Britons working from home more than doubled from 4.7 million to 9.9 million.

Around one in seven working adults worked from home exclusively between 27 April and 8 May 2022 – well after pandemic restrictions had eased.

If you’re running a business from your own home you need to notify your lender. Some lenders prohibit business use as part of the terms and conditions of their mortgage.

However this isn’t as scary as it sounds as in most cases, homeowners are simply doing their regular job from home, being sat in front of a computer. This is unlikely to cause an upset with your lender and they should be able to allow you to continue with your residential mortgage as is.

Commercial mortgages – When is this necessary?

You’re much more likely to need to change the type of your mortgage If you are using more than 40% of your home for business purposes. An example of this would be you running a studio from your home, selling products, and having stock on the premises. This could also be classed as business use for storage, staff, or something else business related. Generally speaking, most lenders will then look to implement a commercial mortgage rate.

Commercial mortgage rates are more costly than residential as the lender is deemed to be taking a greater risk as for example the business could go bankrupt.

Important things to note:

If you are simply working from home a few days a week or just sat using your computer for your employed role this shouldn’t be an issue for your lender.

As with any significant changes to your home, and you are looking to accommodate your own business at your home (for example adding an office), be sure to get approval from your lender.

Running a business can also have tax implications so be sure to speak to an accountant or tax professional to ensure you are taking advantage of all deductions and credits you are entitled to.

If you wish for some help and advice surrounding your mortgage please give us a call, we are happy to help!

David Mortell

David Mortell

David is Ce(MAP) and Ce(RER) qualified and has 14 years’ experience delivering top-rated mortgage and financial advice.In 2014, David took the plunge and started Agentis Financial & Mortgage Solutions with award-winning mortgage broker, Christine Long. Agentis has now become the brokerage of choice in and around Peterborough. David is also a director at our sister company, Agentis Wealth.