Mortgages with One Year’s Accounts: What Are Your Options?

Many self-employed people and company directors worry that they will not be eligible for a mortgage unless they have at least two or three years of trading history. The reality is that it can be possible to arrange a mortgage with just one year’s accounts.

This applies to individuals who are newly self-employed, recently incorporated, or those with only one completed tax return. However, success often depends on how your case is presented and which lender is approached.

Mortgages with One Year’s Accounts

The most straightforward scenario is when an applicant has completed at least 12 months of trading and has one full year of filed accounts or tax returns.

Some high street lenders may consider this, although many prefer a longer track record. Specialist lenders are more commonly used in these cases, especially where the income picture needs further explanation.

Key areas that lenders may consider include:

• Experience within the same industry
• Previous employment history
• Strength and sustainability of income
• Structure of remuneration (salary, dividends, profits)
• Personal credit profile

Mortgages with Less Than One Year’s Accounts – Professional Mortgages

Certain professionals, including doctors, solicitors, accountants, and dentists, may be eligible for a mortgage with less than one year’s accounts.

This route is sometimes available to those who have recently become partners in a practice or changed status from employed to self-employed within the same profession. Lenders may accept projected income or look at historic payslips when assessing affordability.

This can be especially helpful for those who are keen to proceed with a home purchase without having to wait two or three years.

Mortgages with Less Than One Year’s Accounts – Day Rate Contractor Mortgages

Contractors working on a day rate basis may also have options that do not require one year’s accounts.

In these cases, affordability can be based on the value of the contract itself. Many lenders will annualise income using a simple formula:

Day rate × 5 (working days) × 46 to 48 weeks

This approach works well for those in IT, construction, and similar project-based industries. Contractors working through an umbrella company may also use payslips to support their application.

Using the Latest Year’s Accounts

Some clients assume that having one strong year of income will automatically be used to their advantage. In practice, many lenders will take an average of the last two years’ figures.

This can work against individuals whose first year of trading was lower, or where income has grown rapidly.

A small number of lenders may be willing to consider the most recent year in isolation. This can significantly increase the loan amount available, depending on the circumstances.

Sole Trader to Limited Company – Does It Count as One Year?

Changing from a sole trader to a limited company creates a new legal entity, which technically resets the clock in the eyes of some lenders.

However, this is not always the case. Several lenders will treat the move as a continuation of the same business if the applicant has a strong track record and is operating in the same field.

This approach can provide access to better rates and higher loan amounts, particularly if the case is well packaged and clearly explained.

Exceptions Agreed Outside of Policy

Every lender has a framework for how it assesses self-employed income and trading history. In some cases, a lender may consider making an exception where there is strong justification.

This could include factors such as:

• Clear industry experience
• Strong business performance and projected income
• Previous income continuity as a sole trader or employee
• A substantial deposit or low loan-to-value
• Stable professional background

An experienced adviser can make a significant difference in securing these types of exceptions.

Final Thoughts

It is entirely possible to get a mortgage with one year’s accounts, although the route is not always straightforward.

Success depends on the lender, how income is assessed, credit score and how the case is presented. A strategy that works well for one client may not suit another.

For the best outcome, it is recommended to speak with a specialist who understands the self-employed market and has experience working with company directors, contractors, and professionals.

Information correct at time of writing – July 2025
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