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FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

Self employed

We’ve updated our self employed lending criteria to ensure our treatment of 2020/21 income is clear and straightforward.  

We’ve also provided more clarity on our position regarding applicants in receipt of Covid support such as Self Employment Income Support Scheme (SEISS) grants and use of the Job Retention Scheme. We’ve added a self employed section to our criteria pages so you can find the information you need more easily.

Our criteria for self employed applicants effective from 20 August 2021

  • We've increased our maximum Loan To Income from 4.25 to 4.49 and have a range of products available up to 95% LTV (increased from 90% on 10th December 2021.
  • All self employed applicants must have been open for business/trading for the last 3 consecutive months without any government support, e.g. SEISS grants or Job Retention Scheme. When keying 2020/21 tax year income, it is important to deduct SEISS grants 1 to 3 from the self employed income keyed.
  • Applicants can obtain evidence of SEISS grants from HMRC via the following link: Return to your claim for the Self-Employment Income Support Scheme - GOV.UK (www.gov.uk). We require a screenshot showing claim history for grants 1 to 3 and for each of these grants claimed a copy of each claim which can be downloaded as a PDF. We do not require evidence of SEISS grants claimed for the following exceptions:

    • Directors of a limited company
    • Where trading profit exceeded £50,000 in 2018/19 (unless average profits below £50,000 for 3-year period ending 2018/19.
    • Where non-trading income exceeds trading profits (for example employment income or pension)
    • Profit from land and property as this is not classed as trading profit.
  • Affordability is based on the average income over the last 2 years if the latest year has increased, or the latest year if average income has decreased. We manually review cases where a 10% drop in income applies in the last year after deduction of SEISS grants 1 to 3.

Acceptable self employed applicants


Applicants who do not meet the criteria below will be treated as employed customers

Income verification documentation

 

Acceptable documentation