Getting a Mortgage With One Year of Accounts

Who will lend on one year

Most mainstream lenders want two years. A meaningful minority, including several building societies and specialist lenders, will consider one full year of accounts or one completed tax return where the wider picture supports it.

The strongest one-year cases usually share the same features: the applicant was employed in the same line of work immediately before going self-employed, the deposit is 10 per cent or more, the credit file is clean, and the accountant is comfortable commenting on current-year performance.

What counts as one year

Lenders mean one complete accounting period that has been finalised and, for sole traders, filed with HMRC. A part year, a set of management accounts on their own, or a projection is not enough.

If your year end has just passed, getting accounts finalised early can bring forward your application by months. If you are a sole trader, your SA302 and tax year overview need to be available from HMRC, which can take a few days after filing.

Deposit and rate expectations

Plan for 10 to 15 per cent deposit on a one-year case, and treat 5 per cent as unlikely. Where the profile is otherwise strong, some lenders price a one-year case identically to a two-year one; others apply a modest loading. The gap is usually smaller than people expect and often disappears at your first remortgage, once a second year of accounts exists.

How to strengthen a single-year case

Everything here is about showing the year is a floor rather than a peak.

• Evidence of the same trade before you went self-employed, such as an old employment contract or payslips
• Current-year management accounts and business bank statements showing income holding or rising
• A signed accountant's reference or projection for the current year
• Contracts, retainers or a healthy order book proving forward income
• A clean personal credit file and low unsecured borrowing

When waiting is the better option

If your second year end is only a few months away, your income is rising, or your deposit is under 10 per cent, waiting will usually get you a wider choice and a keener rate. We are happy to model both routes so the decision is a numbers decision rather than a guess.