A considerable number of people who took up home working because of the pandemic plan to continue hybrid working in the future, working from home and in the workplace, according to data from the Opinions and Lifestyle Survey.

The Office for National Statistics (ONS) 'Regional patterns in homeworking' report 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. 

Proportion of workers hybrid working 

Before the outbreak of the coronavirus pandemic, one in eight working adults reported working from home (12 per cent). However, during 2022, the proportion of workers hybrid working has been rising, while the proportion of those working from home exclusively has fallen. 

Around one in seven working adults (14 per cent) worked from home exclusively between 27 April and 8 May 2022, while nearly a quarter (24 per cent) both worked from home and travelled to work.

But while working from home comes with a host of handy benefits, the effects it could have on your mortgage aren't often talked about. 

Breaching the terms of your mortgage 

If you're running a business from the comfort of your own home, you need to notify your mortgage lender. If not, you risk breaching the terms of your mortgage contract, with some lenders prohibiting business use as part of the terms and conditions.

In the worst-case scenario, this could result in you having to repay the whole mortgage immediately. 

 However, in most cases homeowners are simply doing their regular job from home.

If that's the case, and you're just at a computer, then it's unlikely this will cause a problem and your lender will probably allow you to continue with your residential mortgage. 

More than 40 per cent of property used for work 

You're much more likely to need to make a change if a significant portion of your property is being used for business purposes.

This could be the case if you sell products and have stock on the premises, or run a photography studio from your residence, among other things. 

"In the worst-case scenario, this could result in you having to repay the whole mortgage immediately."

Generally speaking, if more than 40 per cent of the property is used for work purposes, whether that's for storage, staff or something else, then most mortgage lenders will look to implement a commercial mortgage rate.

Commercial mortgage rates are more costly than residential ones as the lender is deemed to be taking on a greater risk, with the possibility of the business owner going bankrupt, for example. 

Semi-commercial mortgage rate 

Another option that's applicable to some is a semi-commercial mortgage rate. These are used for properties that include commercial and residential characteristics.

Examples include shops with a property on top or pubs that have a living space attached. 

In order to get a semi-commercial mortgage rate, you'll need to contact a commercial mortgage lender rather than a residential provider. 

When it comes to your mortgage and running a business from your own home, you need to keep in mind these five points:

1. Make sure you let your mortgage lender know. They may have some restrictions on what types of business can be run from the property, so it's important to check with them first. 
2. Your business activities could affect your insurance coverage. If you have a home-based business, be sure to let your insurance agent know so that they can adjust your coverage accordingly. 
3. Keep in mind that your business activity may increase the wear and tear on your home, which could impact your mortgage payments. 
4. If you're planning on making any major changes to your home to accommodate your business (such as adding an office), be sure to get approval from your mortgage lender first. 
5. Remember that running a business from home can also have tax implications. Be sure to speak with a tax professional to ensure that you're taking advantage of all the deductions and credits you're entitled to. 

If you are running or planning to set up a business from your home, by following these tips, you can ensure that your home-based business doesn't impact your mortgage negatively. 

Need more information about your mortgage requirements? 

Whatever mortgage you need, the process can be long and complicated. For more information about your mortgage requirements, we'll help you get the answers you need.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

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