Yes. A meaningful minority of lenders will consider a single year of self employed accounts, particularly where you previously worked as an employee in the same field. Most lenders want two or three years, so the choice is narrower and the rate is usually a little higher — but it is far from impossible.
Who these lenders will consider
The strongest one-year cases share a pattern:
You did the same work as an employee immediately before. An electrician who spent eight years employed and then went self employed doing identical work is a very different proposition from someone entering an unfamiliar trade. Lenders can see continuity of skill and income.
Your first year is complete and finalised. A full set of accounts or a filed tax return, not projections. Some lenders will look at part-year management figures alongside the completed year; almost none will lend on projections alone.
There is evidence the work continues. Signed contracts, a booked pipeline, recent invoices, retained clients. A strong first year followed by an empty order book is not a strong case.
Your deposit is reasonable. One-year cases at 95% loan to value are rare. At 10% to 15% the options widen considerably.
What you will need
- One full year of finalised accounts, or an SA302 with the matching tax year overview
- Three months of business and personal bank statements
- Evidence of ongoing work
- Your accountant's details — lenders frequently contact them directly
- Proof of the deposit and where it came from
Two practical points. The SA302 and the tax year overview must match exactly, and the tax generally needs to have been submitted and, for many lenders, paid. And using a qualified accountant matters — some lenders require accounts prepared by someone with recognised qualifications.
How the income is calculated
Same as any self employed case, but with only one year to work from.
Sole traders — net profit from the tax calculation. Company directors — either salary plus dividends, or salary plus your share of retained profit, depending on the lender. The second is often far more generous for directors who leave money in the business.
With only one year, there is no averaging. What that year shows is what you get, which cuts both ways: a strong first year is assessed at full value rather than dragged down by an average, while a modest one has nothing to lift it.
What it costs
Expect a slightly higher rate than a mainstream two-year-accounts case. The gap is usually modest rather than punitive.
The sensible path is often two-stage: take a shorter fixed deal now on one year's accounts, then remortgage once you have two or three years behind you and the mainstream market opens up. We would diarise that.
When waiting is the better answer
Sometimes it genuinely is, and we will say so:
Your second year is trading much better. Waiting for those accounts to be finalised could increase your borrowing substantially — often by more than any rate saving is worth.
Your first year was unusually weak. A start-up year with heavy set-up costs can show a low profit that does not reflect the business. A second year normalises it.
You are close to a year end. If finalised accounts are two months away, waiting two months may transform the options.
You have no deposit to speak of. One-year cases with minimal deposit are difficult. Saving for a few more months does two useful things at once.
Do not restructure your figures to look better
A temptation worth naming. Directors sometimes increase dividends, or sole traders reduce claimed expenses, specifically to improve the profit figure before applying.
Lenders check consistency against the business accounts and bank statements. Sudden changes immediately before an application invite scrutiny rather than approval, and reducing legitimate expenses to inflate profit has tax consequences that usually outweigh the mortgage benefit.
Present the figures as they are. We will find a lender that reads them properly.
Talk it through early
If you have been self employed for around a year and are thinking about buying, an early conversation is worth a lot. Sometimes the answer is apply now; sometimes it is wait four months. Both are useful to know.
Call 0116 277 7536 or see self employed mortgages in Leicester.
More guides: self employed guides for Leicester.
