Self-Employed Mortgages With 1 Year’s Accounts

Getting a mortgage when you’re self-employed can be a little trickier than if you are in a salaried position. A lender is required by regulation to ask for proof of income in the current market in order to determine whether a borrower has the ability to repay a loan. This means you provide details of your accounts, typically from the last two or three years, but what if you haven’t been trading that long?

Do you qualify?


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Author: Carl Shave - CEO and co-founder
Last updated: 05 Mar 2024

How long do I need to have been self-employed for to get a mortgage?

Many lenders require three years’ business accounts to prove income, but the good news is that it is possible to get a mortgage if you’ve only got one year’s accounts. You may need to shop around, possibly via a mortgage broker, but it can be done.

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No matter your income, if you're self-employed, contracting or a sole trader or partnership - we can help you.

Useful Information

Can I get a mortgage with 1 year’s accounts?

This will depend on the lender you use. Most lenders will ask you to provide three years of accounts, often certified by an accountant. However, we know that this is not possible for everybody, with more people than ever becoming freelance, contractors, or setting up their own limited companies. In certain circumstances it may be possible to get a mortgage with only one year’s trading figures.

With 1 year of accounts, a lender will ask for much more information. They may also ask for projections, assets, and information about your employment before you started your own business. Your previous income and employment history will be considered in the underwriting process if you have worked in a similar trade or profession before becoming self-employed.

Providing a larger than average deposit or level of equity to invest in the property, and therefore requiring a smaller loan, will help the lender to feel more comfortable with the risk of lending to you. Showing your commitment to the mortgage in this way may also secure a better interest rate.

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Specialist mortgage lenders for the self-employed

Although some high street lenders will consider lending to self-employed people with only one year’s accounts, other lenders have more narrow criteria. You might need to consider applying to one of the niche-market specialist lenders on the market to get the mortgage you need.

These lenders have geared their assessments and criteria around borrowers whose needs are not met by the high street banks. They might not be huge financial risks, but they need to be viewed in a different way. Some examples of those who have been operating for several years and who are willing to consider self-employed applicants with only one year’s accounts are:

  • Aldermore
  • Bluestone Mortgages
  • Precise Mortgages
  • Pepper Money
  • Kensington Mortgages

At Just Mortgage Brokers we work with all these and more in our efforts to find the right mortgage for self-employed people who only have one year’s trading accounts under their belt. As a result of our expertise and relationships, we not only have access to exclusive products only available through these lenders, but also to any new specialist lenders entering the market.

If you have been declined by high street lenders, fill out our online contact form to schedule a free, no-obligation consultation.

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Proving my income with 1 year's accounts

Lenders will usually use either your accounts or your self-assessment SA302 year-end tax calculation as evidence of your income. If using your accounts, most will require them to have been prepared by a certified or chartered accountant.

Whether you are employed or self-employed, you can normally borrow a maximum of the equivalent of five times your proven annual income, although some lenders may consider less, such as the equivalent of 4 or 4.5. With one year’s accounts, you may be required to have a deposit of at least 10% (or equivalent equity, if remortgaging) and the lender will look for a good credit history.

A lender would normally expect a borrower to have no mortgage arrears or county court judgments (CCJs) against them for a period of two years prior to the date of application. However, if your record shows limited missed and/or late payments in the previous year against credit card bills or store cards, then they may still consider your application. Learn more about bad credit mortgages.

Specialist self-employed mortgage advice

If you are self-employed and have only been trading for a year, then you won’t have more than one year’s accounts and may have difficulty securing a mortgage with the majority of lenders on the market. You’ll need to work with one of the many specialist lending companies catering to the needs of niche-market applicants, but the problem here is that these lenders do not advertise their products publicly and will only deal with applications made via brokers or advisers.

The specialist advice offered by those such as our team at Just Mortgage Brokers will give you the best possible chance of securing the mortgage you need. A deep knowledge of the network of specialist lenders across the UK, especially those who cater to self-employed applicants with only one year’s accounts to show. This will mean you get unbiased, reliable recommendations on which lenders will be the best fit for your needs and circumstances – as well as guidance on how to make your application as strong as it can be. We’ll often spot problems or mistakes that you will not have realised exist.

We have access to over 12,000 mortgage products from more than 90 lenders, many with rates you won’t find on the high street, often on an exclusive basis. Thanks to your strong relationships with lenders, we are able to make informal enquiries before we get to the application process, in order to determine what your chances of getting a mortgage on certain terms will be; ensuring that we don’t waste any of your time (nor harm your credit score) with a failed application. Also sometimes being able to negotiate a bespoke deal depending on supporting factors in your favour when it comes to your projections, future business, previous experience, and more.

To learn more about how we can help you obtain the mortgage you need, don’t hesitate to get in touch with our team on 0800 114 3753, or use our online contact form.

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Mortgages with 1 year's accounts FAQs

It’s possible the amount you can borrow may be increased under specific circumstances, for example, if you have an especially high income.

Or if you are well into your second year of trading and having a better year, you may be able to boost your borrowing based on your accounts for the current tax year, even if they haven’t yet been declared to HMRC. This will depend upon the underwriting policies of the individual lender.

For example, if your income in your finalised accounts for the previous year’s trading was £30,000, but you’ve already hit that figure nine months into the current year, a lender may be prepared to accept projected figures provided by a qualified accountant when deciding how much to lend. That could make a difference between being able to borrow the equivalent of 5 x £30,000 (£150,000) and 5 x £40,000 (£200,000).

Just like getting a mortgage when you are self-employed, it’s also possible to remortgage using just one year’s accounts. The process will be like a remortgage if you were employed, although there may be a stronger case for sticking with your current lender, as they will already know that you are keeping up with mortgage repayments and have access to your history as a borrower.

If your current lender is a mainstream mortgage provider, you could hit a stumbling block if you no longer meet their criteria for lending. In some cases, they might also ask more questions about your income.

It may be easier to get a better interest rate if you are simply looking for a better rate as opposed to consolidating debts or withdrawing equity from your home. Regardless of your situation, reach out to us at Just Mortgage Brokers for advice.

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