First-time buyer success with 1 year of accounts

The Clients & Goal

• To secure a mortgage for a first home purchase at 80% LTV with a property value of £304k, despite having only one year of self-employed trading history.

The Challenge

• Income Evidence: The client had paid himself a minimal salary during his first year of business and had not yet drawn any dividends. This made it impossible to evidence sufficient income through standard tax calculations or personal tax returns.
• Trading History: With only one year of accounts available, most high-street lenders were unable to consider the application, typically requiring a two or three-year track record.
• Previous Advice: The client’s own bank had informed him that he would be required to wait at least another year before he would be eligible for a mortgage.

The Solution

• Broker Expertise: Dave identified a specialist lender comfortable assessing income directly from company accounts rather than relying on personal tax returns.
• Income Optimisation: We navigated the lack of dividends by using the client’s share of net profit plus salary. This captured the true earning power of the business that was otherwise “hidden” on a standard tax overview.
• Lender Selection: Targeted a provider specifically known for supporting entrepreneurs with only one year of accounts, provided the business demonstrates stability.

The Outcome

• Timeline: The application moved from submission to a formal offer in just 14 days, a process that included the physical valuation of the property.
• Success: By bypassing the restrictive criteria of high-street banks, the client was able to purchase his first home a full year earlier than he originally thought possible.
• Comment from Dave: “Many self-employed applicants are told ‘no’ simply because their dividends don’t reflect their business’s actual health. By utilising share of net profit and finding a lender that understands first-year accounts, we can often turn a ‘wait another year’ into a ‘yes’ today.”