By the fourth quarter (Oct to Dec) of 2019, there were more than 5 million self-employed people in the UK*, up from 3.2 million in 2000. Self-employment has contributed strongly to employment growth in the labour market, with self-employed people representing 15.3% of employment, up from 12% in 2000.
Many self-employed people mistakenly think their irregular income or lack of three years’ worth of accounts means they automatically don’t meet the requirements for a mortgage. This is incorrect. In spite of research showing that nearly 50% of applications are getting turned down for “non-standard” reasons including self-employment or contracting, MR Mortgages has a wide range of lenders who are more than happy to lend.
Many high street lenders will require a self-employed applicant to have been trading for 3 years or more, but we has access to lenders who will consider just 1 year of trading. For those that have been self-employed for some time, we also have lenders who will consider taking just the latest years profit figures rather than averaging the last 3 years.
Company Directors who own more than 20-25% of the company will also be treated as self-employed. Many lenders will use the PAYE income and the Directors dividends for affordability. It may be more favourable for affordability to contact us to help you find a lender that will consider the share of profits instead of dividends.