Can You Get a Mortgage With Only One Year of Trading History?

Becoming self-employed brings flexibility and independence, but it can also make mortgages feel more complicated. One of the most common questions new business owners ask is whether lenders will consider them with only a single year of accounts. The short answer: yes, a mortgage with one year trading history is possible, but lender choice is more limited and underwriting is more detailed.

This guide covers how lenders assess new self-employed applicants, what documentation they expect, and how to strengthen your profile. This is general information only and not regulated mortgage advice.

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Why Lenders Prefer More Than One Year of Trading

Most lenders want to see at least two years’ accounts because it helps them establish:

• Business sustainability
• Income reliability
• Profit trends
• Cash flow stability

With only one year of trading, lenders have limited evidence to understand long-term earning potential. However, this doesn’t mean approval is impossible — it simply means the assessment is more specialised.

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Can You Get a Mortgage With One Year of Trading History?

Yes. Some high street lenders and several specialist lenders will consider applicants who have only completed one full year of trading, provided the overall financial picture is strong.

Approval depends on:

• The type of self-employment
• Income level and consistency
• Strength of trading accounts
• Bank statement conduct
• Industry stability
• Deposit size
• Credit history

Certain employment types, such as contractors, may be able to use alternative income evidence.

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Who Can Get a Mortgage With One Year of Accounts?

You may be considered if you are:

1. A Sole Trader

With one completed tax year and supporting SA302 + Tax Year Overview.

2. A Limited Company Director

Typically requiring:

• One full year of filed accounts, and
• Evidence of company performance via bank statements or management accounts

Some lenders may also review retained profit.

3. A Contractor With a Day Rate

Contractors may not need traditional accounts if they have:

• A current contract
• A strong day rate
• A history of work in the same field

Some lenders calculate income based on your day rate × 46–48 working weeks.

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What Documents Do Lenders Require?

Expect to supply:

• One full year of SA302 and Tax Year Overview
• Full trading accounts (for limited company directors)
• 3–12 months’ business bank statements
• 3 months’ personal bank statements
• Accountant’s reference (for some lenders)
• Evidence of ongoing or future work (especially for contractors)

Documentation must clearly demonstrate sustainable income.

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How Lenders Assess Applicants With Limited Trading History

1. Strength of First-Year Performance

Lenders analyse:

• Turnover
• Profit
• Operating costs
• Cash flow patterns

A strong first year gives lenders more confidence.

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2. Previous Industry Experience

If you worked in the same field before going self-employed, lenders often view this positively.

For example:

• An electrician employed for 10 years who becomes a sole trader
• A graphic designer who went freelance after agency employment
• A contractor with years of experience in a specialist industry

Experience suggests income stability going forward.

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3. Business Growth Evidence

Lenders may request:

• Management accounts
• Pipeline invoices
• Signed contracts
• Renewal agreements

This helps demonstrate that income isn’t a one-year anomaly.

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4. Bank Statement Conduct

Lenders carefully check:

• Regular incoming payments
• Predictable spending patterns
• No unarranged overdraft use
• Bills paid on time
• Clear separation of personal and business finances

Solid conduct supports affordability.

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5. Deposit Size

A larger deposit reduces lender risk.
While not essential, it can expand available lender options.

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High Street vs Specialist Lenders

High Street Lenders

Some high street lenders will consider applicants with one year of accounts if:

• Income is stable
• Industry is low-risk
• Personal credit is strong
• Bank conduct is consistent

However, their criteria are tighter and automated systems may not accept complex profiles.

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Specialist Lenders

Often more suitable because they:

• Use manual underwriting
• Review the full context of the business
• Accept income growth
• Consider contract-based earnings
• Assess retained profit for limited companies

Specialist lenders regularly approve applications where high street lenders cannot.

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How Affordability Is Calculated With One Year Trading History

Affordability is typically based on:

• Profit (sole traders)
• Salary + dividends (directors)
• Salary + share of net profit (some lenders)
• Retained profit (selected lenders only)
• Day rate (for eligible contractors)

Lenders tend to use the most recent figures because no multi-year average is available.

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Common Scenarios

Scenario 1: Strong first year, industry experience

Many lenders are comfortable if financial behaviour is stable.

Scenario 2: High profit but poor personal bank conduct

Underwriters may question sustainability.

Scenario 3: Contractor with a strong day rate

Often accepted even without full accounts.

Scenario 4: Limited company with high retained profit

Some lenders will treat retained profit as income.

Scenario 5: First year much lower due to start-up costs

Some lenders may accept with explanation and improving management accounts.

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How to Strengthen Your Application

(General Information Only)

Many applicants with one year of trading choose to:

1. Keep personal and business accounts separate

Clear financial lines make underwriting easier.

2. Ensure business bank statements show healthy cash flow

Regular invoicing and stable balances create confidence.

3. Maintain strong personal financial conduct

Avoid unarranged overdrafts, missed bills or unexplained spending.

4. Prepare management accounts if income is trending upward

This can help illustrate business momentum.

5. Avoid taking new credit before applying

Keeps affordability clear and reduces risk.

6. Prepare a short explanation of trading history

Context helps manual underwriters understand fluctuations or start-up costs.

These are general considerations only and not regulated advice.

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Summary

A mortgage with one year trading history is achievable, but lender choice depends on:

• Industry type and business model
• Financial stability shown in the first year
• Previous employment experience in the same field
• Bank statement conduct
• Type of income (profit, dividends, contractor day rate)
• Strength of supporting documents

Specialist lenders play an important role for applicants early in their self-employment journey, offering flexible assessments where high street lenders may not.

This article provides general information only. For tailored recommendations, regulated mortgage advice is required.