M
MortgageOS
Scenario Guide

First Year Self-Employed: Can You Get a Mortgage?

Understanding your options when you're newly self-employed, what lenders look for, and how to improve your chances of getting approved.

Updated January 202610 min read

Reality Check

Let's be honest: getting a mortgage in your first year of self-employment is challenging. Most lenders require 2-3 years of accounts or tax returns. However, "challenging" doesn't mean impossible — there are options if you know where to look.

The Challenge

  • • Most high street banks require 2-3 years history
  • • Limited track record = higher perceived risk
  • • May face higher interest rates
  • • Fewer lender options available
  • • May need larger deposit

The Opportunity

  • • Some lenders accept 1 year of accounts
  • • Previous industry experience helps significantly
  • • Strong contracts/evidence can compensate
  • • Building societies often more flexible
  • • Specialist brokers know the options

The key question

Can you demonstrate that your self-employed income is sustainable? Lenders aren't against new businesses — they're against uncertainty. Show them your income is reliable, and options open up.

Lender Requirements

Different lenders have different minimum trading history requirements:

High Street Banks

Most restrictive

Typically require 2-3 years of accounts or SA302s.

Examples: Barclays, HSBC, Lloyds, Santander

Nationwide & Some High Street

Moderate

May accept 2 years, sometimes 1 year with strong application.

Examples: Nationwide, Halifax (case-dependent)

Building Societies

More flexible

Often accept 1 year of accounts with manual underwriting.

Examples: Yorkshire BS, Skipton, Leeds BS, local building societies

Specialist Lenders

Most flexible

Some accept 1 year or even less with strong evidence.

Examples: Kensington, Precise, Vida (broker-only)

What "1 Year" Actually Means

When lenders say they accept "1 year" of self-employment, they typically mean:

  • • 1 complete tax year — April to April, reflected in an SA302
  • • 1 set of annual accounts — For your company's accounting period
  • • 12 months of trading — Evidence of continuous business activity

Note: 9 months of trading usually doesn't count as "1 year" — you'll need to wait for a complete period.

Improving Your Chances

1. Leverage Previous Experience

If your self-employment is in the same field as your previous employment, emphasize this. Lenders view "employed electrician becomes self-employed electrician" very differently from "accountant becomes dog walker."

Prepare: CV showing industry experience, references from previous employer, evidence of qualifications/certifications

2. Show Strong Contracts/Pipeline

Current contracts, retainer agreements, or a strong order book demonstrate that your income will continue. Future commitments reduce lender risk.

Prepare: Signed contracts, retainer agreements, letters of intent from clients, order/booking records

3. Get Accountant Support

An accountant's letter confirming your trading history, projected income, and business sustainability carries weight with lenders.

Prepare: Accountant projection letter, management accounts, confirmation of trading period

4. Maximize Your Deposit

A larger deposit reduces lender risk and opens more options. With limited trading history, aim for 15-25% deposit rather than minimum 5-10%.

Impact: Higher deposit = more lenders willing to consider you, better rates, stronger application

5. Use a Specialist Broker

Brokers who specialize in self-employed mortgages know which lenders are flexible with trading history and how to present your case.

Benefit: Access to broker-only lenders, knowledge of criteria exceptions, stronger application presentation

Alternative Options

If Standard Routes Don't Work

Joint Application with Employed Partner

If your partner is employed, their income may be enough for the mortgage. Your self-employed income could be excluded or partially counted.

How it works: Primary reliance on employed income, your income as supplementary (if counted at all). Opens high street options.

Guarantor Mortgage

A family member guarantees the mortgage, reducing lender risk. Their income and/or property provides additional security.

Consider: Family must understand the liability they're taking on. Not all lenders offer this.

Rent for Now, Buy Later

If options are very limited, building another year of trading history significantly improves your position. Use this time to save more deposit too.

Strategy: Focus on building clean accounts, consistent income, and larger deposit over 12 months.

Avoid desperation decisions

Don't accept a very high-rate mortgage out of impatience. If waiting 6-12 months for better options saves 1-2% on rate, that's significant money over a mortgage term. Calculate the true cost before accepting poor terms.

Preparing for Next Year

If getting a mortgage right now isn't realistic, use this time to prepare for a stronger application in 12 months:

12-Month Preparation Plan

Now

Set Up Proper Records

Get an accountant, use accounting software, separate business and personal finances.

Month 3

Check Credit Report

Fix any issues, register on electoral roll, close unused credit accounts.

Month 6

Build Savings

Increase deposit contributions. Aim for 15-20% deposit to improve options.

Month 9

Talk to Broker

Get advice on what lenders will need. Identify any gaps to address.

Month 12

File Tax Return Promptly

Get your SA302 as soon as possible after tax year ends (after 5 April).

The difference a year makes

With 1 complete year of trading (ideally 2), your options expand dramatically. High street banks become available, rates improve, and the process becomes much smoother. The wait is usually worth it.

Check your options

See which lenders might work for your situation, even with limited trading history.

Get started

Frequently asked questions