Being self-employed doesn't mean you're locked out of the mortgage market — but the process is different, and preparation is key.

Whether you’re a sole trader, limited company director, contractor, or freelancer, 2025 brings new lender criteria, shifting affordability models, and a growing appetite from specialist lenders.

The good news? If you can show consistent income and manage your documentation, you have more options than ever.

Who qualifies as self-employed?

In the eyes of lenders, you’re usually self-employed if you own more than 25% of a business and your income isn’t derived from PAYE employment.

This includes:

• Sole traders
• Partners in a partnership
• Limited company directors
• Freelancers and gig economy workers
• Contractors (IT, engineering, finance, creative)

Different business structures = different rules for proving income. That’s where expert guidance becomes critical.

What do lenders need to see?

In 2025, most lenders want to see two years of trading history, though some will consider applicants with just one year — especially if you’ve transitioned from a PAYE role in the same industry.

Key documents include:

🧾 SA302s or tax calculations from HMRC
📊 Full accounts (for Ltd Co. directors)
📈 Bank statements (business and personal)
📃 Accountant’s reference

Your income should show stability — and ideally growth — over the past two years. A good broker can match you with lenders who take a pragmatic view.

Ltd Company directors: Salary, dividends, or net profit?

If you're a limited company director, lenders will usually assess:

• Your salary
• Your dividends
  …or in some cases,
• Your share of net profit retained in the business

🧠 Tip: If you retain profits in your business to reduce tax, look for lenders who accept net profit plus salary — not just what's drawn.

In 2025, more lenders are open to this approach, especially if your business is stable and has strong liquidity.

Sole traders and partnerships

Sole traders are typically assessed on net profit after allowable expenses.

If you’ve seen a sharp increase or drop year-on-year, lenders will either:

• Average the two years
• Take the lower figure
• Request a projection from your accountant

You’ll also need to show that business income reaches your personal account consistently — especially if you operate in cash-heavy sectors.

Contractors and freelancers

For day-rate contractors (common in IT, finance, media), 2025 lenders often assess income using a daily rate x days worked model — not annual accounts.

💼 Example: A contractor on £500/day, 5 days/week, 46 weeks = £115,000 annualised income

Some lenders require:

• 6–12 months of contracts
• Gaps between contracts to be minimal
• Proof of ongoing work or renewals

Even with just 12 months of trading history, contractors can secure competitive rates if they package their case properly.

What if you have less than 1 year of trading?

It’s tougher, but not impossible.

Options include:

• Specialist lenders who accept 9–12 months
• Using previous employment history as support
• A strong deposit (20%+) to offset risk
• Additional guarantors or joint applications

Your broker may also be able to structure a joint borrower, sole proprietor mortgage if affordability is tight but you want to keep ownership clean.

How to maximise your approval chances

If you're self-employed, here’s how to get ahead in 2025:

✅ Keep your accounts up to date — file early
✅ Work with a chartered accountant
✅ Avoid large year-end expenses that reduce declared profit
✅ Don’t mix personal and business spending
✅ Get your credit file in good shape (clean, low utilisation)

And most importantly — speak to a mortgage specialist early.

How brokers add serious value for self-employed clients

At Willow Private Finance, we help self-employed clients secure mortgages every day — even in complex cases where income isn’t straightforward.

We can:

• Match you with lenders who understand your setup
• Present your income in the strongest possible light
• Liaise directly with your accountant to package the case
• Secure competitive rates across the whole market
• Handle tricky scenarios (irregular income, short history, recent incorporation)

You focus on running your business — we’ll focus on the mortgage.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We’ll help you find the smartest way forward—whatever rates do next.