Can I get a mortgage with one year of accounts?

Yes, with specialist lenders. Several UK specialists accept one year of accounts for sole traders and directors, particularly where the preceding period of employment in the same field can be evidenced. Mainstream lenders usually require two or three years.

What counts as self-employed income for a lender?

For sole traders, it is net profit from SA302s. For limited company directors, most lenders use salary plus dividends, but a growing number accept salary plus retained profit in the company — often giving a meaningfully higher affordability figure. Contractors are typically assessed on day-rate × a set multiplier.

Are contractor mortgages different?

Yes. Several lenders offer contractor-specific products that assess affordability off the current day rate rather than filed accounts. Requirements usually include 12+ months in the same field and a rolling contract.

Do lender criteria change for limited company directors?

Significantly. Lenders that use salary + dividends only will often decline cases that are identical in economic substance to cases lenders using salary + retained profit approve. Matching case to lender is the single most important step.

Self-Employed Mortgage Declined?

Self-employed applications are disproportionately declined by mainstream UK banks — not because the income is insufficient, but because it rarely fits a tidy two-year average of salaried PAYE. Specialist lenders have built criteria around the actual shapes that self-employed income takes, and for most cases that is where the application should have started.

Why high-street banks decline self-employed cases

Mainstream lenders reduce risk through standardisation. For self-employed income that means:

Requiring two or three years of filed accounts or SA302s.
Averaging the last two years, which penalises any recent strong year.
Using salary + dividends only for limited company directors, ignoring retained profits.
Applying income multiples (typically 4–4.5x) to whichever averaged figure they arrive at.
Auto-declining anyone in their first year of trading.

A sole trader whose latest year is £80k but whose two-year average is £55k is effectively assessed as a £55k earner — even when tax returns and bank statements prove the £80k trend.

How specialist lenders underwrite self-employed income

The specialist market has material flexibility across several dimensions:

Years of accounts

Several lenders accept just one year of accounts, especially when the applicant was PAYE in the same field immediately before setting up. Two-year averages can be replaced by "latest year only" underwriting for cases with a clear upward trend.

Limited company directors — salary + retained profit

A director taking £12k salary and £30k dividends, with £60k left in the company as retained profit, is assessed at £42k by most mainstream lenders and closer to £100k by lenders that use salary + retained profit. That is often the difference between decline and offer.

Contractors

Day-rate contractors (IT, engineering, construction professions) are increasingly assessed on their current contract: day rate × 5 × 46 weeks, for example, to produce an annualised figure. Requirements usually include 12+ months in the same field and evidence the rolling contract is active.

Mixed income

Part-PAYE, part-self-employed cases are a frequent mainstream decline reason. Specialist lenders combine the two sources rather than trying to fit the case into a single category.

What to prepare before you apply

Two years of SA302s (sole traders) or filed accounts (directors) if available — download SA302s directly from your HMRC online account.
Three months of business and personal bank statements.
For directors: company accounts showing retained profits; an accountant's reference can help.
For contractors: current contract, 12 months of prior contracts or invoices, and CV.
A clear affordability note explaining the trend — a good broker presents this to the underwriter rather than leaving the lender to interpret the numbers.

Frequently asked questions

Can I get a mortgage with one year of accounts?: Yes, with specialist lenders. Several UK specialists accept one year of accounts for sole traders and directors, particularly where the preceding period of employment in the same field can be evidenced. Mainstream lenders usually require two or three years.
What counts as self-employed income for a lender?: For sole traders, it is net profit from SA302s. For limited company directors, most lenders use salary plus dividends, but a growing number accept salary plus retained profit in the company — often giving a meaningfully higher affordability figure. Contractors are typically assessed on day-rate × a set multiplier.
Are contractor mortgages different?: Yes. Several lenders offer contractor-specific products that assess affordability off the current day rate rather than filed accounts. Requirements usually include 12+ months in the same field and a rolling contract.
Do lender criteria change for limited company directors?: Significantly. Lenders that use salary + dividends only will often decline cases that are identical in economic substance to cases lenders using salary + retained profit approve. Matching case to lender is the single most important step.