Over 60% of First-Time Buyers Rely on Side Hustles—But Experts Warn of Tax Penalty Risk Ahead of October 5th HMRC Deadline

Over 60% of first-time homebuyers are relying on secondary income streams and side hustles to achieve homeownership, according to new survey data by Mojo Mortgages.

However, industry experts are issuing an urgent warning: thousands of side-hustling buyers face unexpected HMRC tax penalties or derailed mortgage applications if they miss the upcoming 5th October Self Assessment registration deadline.

Shaving Years Off the Property Ladder

The findings from Mojo Mortgages survey reveal a dramatic shift in how Britons save for their first homes. A majority of prospective buyers (64%) report using secondary income sources such as selling secondhand goods on platforms like Vinted or eBay, freelance work, delivery driving, or online tutoring to build their deposit.

For most, this extra work is essential:

• 53% of buyers said their side hustle reduced their deposit saving time by 2 to 3 years.
• 72% reported cutting between 2 and 5 years off their timeline to buy a home.

Younger buyers are driving the trend, with 72% of 18-to-24-year-olds currently running a side hustle specifically to fund a property deposit or long-term savings.

The October 5th “Side Hustle Tax” Deadline

While side hustling is accelerating property ownership, it also introduces a financial regulatory hurdle. Under UK tax rules, anyone who earned more than £1,000 gross income from self-employment or trading between 6 April 2025 and 5 April 2026 must register for Self Assessment with HMRC by 5th October.

Failing to register by the deadline can trigger automatic penalties, interest on unpaid tax, and potential issues when proving income to mortgage lenders.

Mortgage Approval and HMRC Compliance

Beyond avoiding tax penalties, legal compliance is crucial for buyers seeking mortgage approval. Lenders typically require official proof of extra earnings, such as an SA302 form or Tax Year Overview, before counting side hustle income toward a borrowing limit.

Unreported side hustle income cannot be used to boost loan eligibility, meaning buyers who fail to declare earnings could see their borrowing power reduced.

Key Information for Side Hustlers:

Notes

Survey conducted by Censuswide on behalf of Mojo Mortgages in April 2026. Sample size: 1,000 UK first-time buyers (UK customers in the market, actively in the buying process and those who have bought in the last 12 months). Percentages have been rounded to the nearest whole number.

Question Context: “Which, if any, of the following ‘money secrets’ have you kept / did you keep from a partner or family member(s) to improve your chances of getting a mortgage or buying a home?” (Select all that apply)