Can you get a mortgage with one year’s accounts?

Getting a mortgage with one year’s accounts can be more challenging than applying with two or three years of self-employed income history, but it does not always make a mortgage impossible.

Some lenders prefer a longer trading record, while others may consider one year’s accounts if the rest of your application is strong. That means your deposit, credit history, previous work experience, income stability and supporting documents can all make a difference.

The key point is that this is not just about affordability. It is about finding a lender whose criteria fit your situation.

Can you get a mortgage with one year’s accounts?

Yes, you may be able to get a mortgage with one year’s accounts, but your options are likely to be more limited.

Many lenders are more comfortable when self-employed applicants have at least two years of accounts because it gives them more evidence of stable income. However, some lenders may consider one year if they can see that your income is reliable and likely to continue.

This can be more realistic if you have:

• A larger deposit and lower loan-to-value
• A strong credit profile
• Low personal debt
• Previous employment in the same industry
• Finalised accounts or HMRC income evidence that meets the lender’s requirements
• Stable or growing income
• Bank statements or other supporting evidence that backs up the income being used

For example, someone who worked as an employed electrician for eight years, then became self-employed and earned a similar income in their first year, may be easier for some lenders to assess than someone who has started a completely new business with no trading history.

Why do many lenders prefer two years of accounts?

Lenders want to understand whether your income is sustainable.

With employed applicants, payslips and a contract can usually show current earnings clearly. With self-employed applicants, income can move up and down depending on trading conditions, business costs, seasonality and client demand.

Two years of accounts gives lenders more evidence. They can see whether income is stable, increasing or falling. They can also compare your latest year against previous earnings.

With only one year’s accounts, the lender has less history to work with. A strong first year is helpful, but some lenders may still ask whether that level of income is likely to continue.

There’s no universal FCA rule saying self-employed applicants must have two years of accounts. FCA rules instead require lenders to obtain adequate evidence for the income they use, and recognise that the type and period of evidence can vary depending on factors such as employment status, length of employment and the nature of the income.

This is why a self-employed mortgage with one year’s accounts often depends on the wider application, not just the headline profit figure.

For more detail on this, you may want to read about how lenders calculate self-employed income.

When might one year’s accounts be enough?

A mortgage with one year’s accounts may be more achievable when there is a clear reason for the lender to trust the income.

This is often the case when your self-employed work is closely linked to your previous career. If you were previously employed in the same role or industry, the lender may see your self-employment as a continuation of your earning history rather than a completely new risk.

A stronger case may include:

• Previous PAYE employment in the same sector
• Similar or higher income since becoming self-employed
• A larger deposit and lower loan-to-value
• No recent missed payments, defaults or CCJs
• Finalised accounts or HMRC tax documents that meet the lender’s requirements
• Regular business income shown on bank statements
• Existing contracts or repeat clients

Contractors can sometimes be in a stronger position too. For example, an IT contractor with a current contract, a strong day rate and several years of previous IT experience may have more options than someone with a new business and irregular income.

This is where self-employed mortgage advice can help, because different lenders look at these cases in different ways.

When might it be better to wait?

Applying immediately is not always the best option.

It may be better to wait before applying for a mortgage with one year’s accounts if your income evidence is weak or your next set of figures is likely to put you in a stronger position.

Waiting may be sensible if:

• Your first-year income was low
• Your income is irregular or falling
• Your accounts are not yet finalised
• You have a small deposit
• You have recent credit issues
• You need to borrow close to the maximum possible amount
• Your second year is likely to show stronger income

For example, if your first year of trading shows £28,000 profit but a stronger second year is nearly finalised, waiting until you have two years of evidence may give you access to lenders that require a longer trading history. However, that does not mean the higher second-year figure will automatically be used in full, because lenders calculate self-employed income differently.

This does not mean you should always wait. It means the timing of your application matters.

What documents might you need with one year’s accounts?

For a mortgage with one year’s accounts, lenders may want more supporting evidence than they would from an employed applicant.

You may need the following self-employed mortgage documents:

• Finalised business accounts
• SA302 tax calculation
• Tax year overview
• Personal bank statements
• Business bank statements
• Proof of deposit
• ID and address documents
• Accountant’s details
• Current contracts, if relevant
• Evidence of previous employment or industry experience

The evidence depends on how you trade and the lender’s criteria. A sole trader or partner may be asked for tax calculations and tax year overviews, while a limited company director may be asked for finalised company accounts. Business bank statements, contracts or accountant details may also be requested.

Current lender requirements show how this can work in practice. HSBC’s public mortgage document guide, for example, says applicants who have been trading for less than two years can be considered with at least one year of the relevant accounts or HMRC tax documents, together with recent business bank statements.

Examples of one-year accounts mortgage applications

First-year sole trader with strong previous PAYE history

A graphic designer was employed for six years, then became a sole trader 13 months ago. Their first-year accounts show £48,000 net profit. They have a 15% deposit, clean credit history and regular income from long-term clients.

This may be a stronger case because the applicant has clear industry experience and their self-employed income is linked to their previous career.

Contractor with a current contract

An IT contractor has been self-employed for one year. They have a current 12-month contract at £450 per day and previously worked in permanent IT roles for several years.

Some lenders may consider this type of one year self-employed mortgage application because the contract gives additional evidence of current income.

New business owner with high income but limited evidence

A new business owner has earned £90,000 in their first year, but the income came from a few irregular payments. The accounts are not yet finalised and business bank statements show uneven cash flow.

Despite the high income, this may be harder for a lender to assess. The issue is not only how much the applicant earned, but whether that income looks repeatable.

Why lender choice matters

Not all lenders treat self-employed applicants the same way.

Some lenders require at least two years of self-employment evidence, while others can consider applicants who have been trading for less than two years with one year of accounts or HMRC documents and additional supporting evidence.

For example, Nationwide currently says applicants need to have been self-employed in the UK for at least two years, while HSBC publishes a route for applicants trading for less than two years.

This matters because applying to the wrong lender can create avoidable problems. You could lose time, face unnecessary stress or end up with a declined application that might have been avoided with a better lender match.

A broker can help by looking at your situation before you apply and identifying lenders that may consider your trading history, income structure and supporting evidence.

This is especially important with a recently self-employed mortgage application, where the details can matter more than the headline income figure.

Getting help with a mortgage after one year trading

If you only have one year’s accounts, Monday Mortgages can help you understand whether it may be worth applying now or whether waiting could put you in a stronger position.

This is not about pushing every applicant to apply immediately. In some cases, applying now may make sense. In others, waiting for stronger accounts, a larger deposit or clearer evidence of stable income could improve your options.

You can also use our self-employed mortgage calculator to estimate how much you could borrow, but treat this as a rough guide only. A calculator result does not prove that a lender will accept your income or approve your application.

For tailored support, visit our self-employed mortgages page or speak to us about getting a mortgage when self-employed.