Do You Need 2 Years of Self‑Employed History?
DIRECTOR AND MORTGAGE ADVISER
Specialist broker for high-earning professionals and complex income cases.
Quick Take
You don’t always need two full years. While it’s the mainstream standard, some lenders may consider one year of self‑employed accounts/returns—particularly for contractors and LLP partners with clear continuity and strong evidence. Results are case‑by‑case and depend on affordability.
Request your fee free mortgage consultation today. No obligation, just sound advice.
Why Lenders Like 2 Years
Stability: Two full tax years help smooth one‑offs and show trend.
Affordability Modelling: Underwriters can average or use the lower/latest year to stress test.
Audit Trail: HMRC filings, accounts and bank statements align across a longer period.
Two years is a guideline, not a law. Lender policy varies and changes regularly.
When 1 Year May Be Considered
1) Day‑Rate Contractors (Professional Services/Tech/Finance/Legal)
Some lenders assess on day rate × 5 × ~46–48 weeks, subject to contract length, history in the field, and gaps.
Strong cases include a current contract, evidence of renewals, and CV showing continuity of earnings.
2) Newly Promoted LLP Partners
If you’ve moved from senior employee to equity or salaried partner at the same firm, some lenders may take a pragmatic view—especially with strong current‑year drawings and a firm letter confirming status/expectations.
3) Limited Company Directors With Long Sector History
Where personal/company bank statements and first‑year accounts are strong—and your prior PAYE role shows continuity—some lenders may consider.
4) Returning to the UK With Recent Self‑Employed Start
Bespoke options may exist where assets, liquidity and prior track record are clear. Expect deeper due diligence.
5) Private Bank Route
For large loans, some private banks may consider asset‑backed or AUM‑linked solutions with shorter trading history—subject to detailed review.
How We’ve Helped Clients Like You
These clients faced similar challenges - here’s how we helped them secure the right deal.
What Evidence Helps (For 1‑Year Or New Self‑Employed Cases)
SA302 & Tax Year Overview (latest filed) and, if available, filed first‑year accounts signed by a qualified accountant.
Current‑year management info (e.g., YTD accounts, drawings schedule, or pipeline) to show sustainability.
Employment/sector continuity: CV, previous payslips/P60s, or firm letter confirming promotion/partnership.
Contract pack (for contractors): Signed contract, extension history, recent bank credits matching invoices, and any agent confirmation.
Bank statements: 3–6 months for personal and business accounts, showing consistent income flow and prudent outgoings.
Liquidity and buffers: Savings, retained profits or pledged AUM—particularly relevant for large loans or part interest‑only structures.
Common Pitfalls (And How To Avoid Them)
Mismatch between SA302 and TYO: Figures must align.
Large unexplained credits: Add a simple explanation (distribution, invoice settlement, asset sale).
Gaps in contracting: Short gaps are often fine; document the reason and next steps.
Aggressive expense treatment: Big first‑year write‑offs can depress affordability; be ready to explain.
Over‑reliance on projections: Helpful for context but rarely counted as income on their own.
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How Contractors Are Assessed (At A Glance)
Income Basis: Often day rate × 5 × 46–48 weeks; some lenders want a minimum remaining term on the current contract (e.g., 3–6 months) and a track record (e.g., 12+ months contracting or continuous employment in same field).
Documents: Contract, CV, renewal history, invoices and matching bank statements.
Gaps: Short, well‑explained gaps are usually acceptable; long gaps weaken the case.
How LLP Partners Are Assessed (At A Glance)
Income Basis: Typically two years’ SA302s/TYOs for profit share/drawings; newly appointed partners may be considered with strong current‑year evidence and a firm letter confirming status and methodology.
Capital Contributions & Loans: Disclose capital loans; repayments may be factored into affordability.
Presentation: A brief cover note describing the drawings cycle, tax reserves, and any step‑change (e.g., promotion) helps underwriters.
Interest‑Only And Offset: Do They Help?
Interest‑Only: Can keep payments manageable on large loans but doesn’t bypass affordability and comes with LTV caps and a required repayment strategy.
Offset: Improves cash flexibility and reduces interest cost but does not increase calculated income for affordability.
What Our Clients Say
What To Prepare (Short Checklist)
ID & Address proof.
SA302s/TYOs (latest two if available; at least the latest filed year) and any first‑year accounts.
Contract/Drawings Evidence: Contracts, remittances, or firm letters.
Bank Statements: 3–6 months personal and business.
Asset/Liability Snapshot and a brief context note (promotion, new contract, return to UK, planned capital events).
How Kite Mortgages Helps
We clarify which lenders are open to < 2 years in your specific profile (contractor, LLP partner, company director).
We map the document strategy first—what to request from HMRC, your firm or your accountant—so underwriting is smooth.
We explain structure choices (repayment vs part interest‑only; fixed vs tracker; offset) in plain English—no heavy calculations, just clear options.
We coordinate timing around tax filings, contract dates and ERC windows so you aren’t forced into a last‑minute decision.
Request your fee free mortgage consultation today. No obligation, just sound advice.
FAQs
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No. It’s lender policy, not law. Many mainstream lenders prefer 2 years, but some consider less.
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Sometimes—especially for contractors and cases with strong continuity. Documentation quality is crucial.
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Some lenders may average; others may take the lower or latest—policy varies and changes.
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Some lenders consider it with haircuts and extra checks. Evidence and residency/visa status matter.
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Lower LTVs can widen lender choice on shorter histories. The right structure matters as much as the headline rate.
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APPROVED BY THE OPENWORK PARTNERSHIP ON 19/09/2025.