Yes, you absolutely can buy a new build home when you're self-employed, but it comes with a slightly different set of things to watch out for. This guide breaks down how lenders look at self-employed income, what paperwork to have ready, what schemes there are to help, and the extra bits new builds bring, like deposit rules and tight deadlines. You’ll be repainting those white walls in no time.
"Many self-employed buyers think a new build is out of reach. It rarely is. Lenders are used to working with sole traders, contractors and company directors. The key is understanding how they assess your income and making sure you’re prepared for the new build buying process."
Rachel Geddes
Strategic Lender Relationship Director
How self-employed income is assessed for a mortgage
Who counts as self-employed?
If you work for yourself rather than being on Pay As You Earn (PAYE) with an employer, lenders will usually class you as self-employed. This can include a few different setups:
Sole traders – you run your own business and keep the profit after tax.
Partnerships – you share a business, and its profits, with one or more people.
Limited company directors – you own shares in your own company. You usually take income through a mix of salary and dividends.
Contractors – you work on a self-employed or freelance basis, often through your own limited company or an umbrella company.
What is a self-employed mortgage?
There's no such thing as a 'self-employed mortgage' – self-employed buyers can get the same mortgage deals as everyone else. The difference is how lenders work out self-employed income compared to PAYE.
How lenders calculate qualifying income
Mortgage lenders want to see that your income is steady because they want to know that you can repay the loan. Most look at your past two or three years accounts. Some may accept one year – especially if you've stayed in the same line of work.
What counts as income depends on your setup:
Sole traders and partners – lenders usually look at your net profit before tax.
Limited company directors – lenders look at your salary and any dividends. Or they'll look at your salary and your share of the company's profit. This second option can help if you leave a lot of profit in the business.
Every lender does this a bit differently. This is why it pays to work with a mortgage broker, like Mab, with loads of experience helping self-employed people sort their mortgages.
Documents you'll need
Not the most exciting part, but having your paperwork ready can make the mortgage process much smoother. Most lenders will ask for some or all of the following:
Certified accounts – usually two to three years, signed off by a qualified accountant.
SA302s – these show the income you declared to HMRC (you can download SA302s from your online tax account).
Tax year overviews – these confirm your SA302 figures match HMRC's records.
Business bank statements – these show the pattern of your business income.
Get these documents ready early. Then you can move fast once you find the right home. This matters even more with a new build (as you'll see below).
Speak to an adviser
Ready to see where you stand? We can help. Speak to one of our mortgage advisers to find out how your income will be assessed and how much you could borrow.
How do new build mortgages work?
Reservation
When you find a new build you love, you'll usually pay a reservation fee to secure it, a bit like a deposit. This is often between £500 and £2,000. It takes the property off the market while your mortgage and legal work are sorted.
Reserving a home starts the clock ticking. This is why it helps to have your paperwork organised, or well underway, before you reserve.
Getting a new build mortgage
Once you've reserved your home, you'll need a mortgage offer.
Lenders assess new builds differently from older homes. Some lenders are more cautious because it can be harder to judge the value of a brand new property. So you may need a bigger deposit to buy a new build home.
Fewer lenders at higher loan-to-values
Loan-to-value (LTV) is the percentage of the property price you borrow as a mortgage. For example, a 5% deposit means you need a 95% LTV mortgage.
Fewer lenders offer their highest LTV deals on new builds compared with older homes. This doesn't mean buying with a small deposit is impossible – it just means your choice of lenders may be more limited.
So you may need a bigger deposit to buy a new build home. This is worth planning for early, since a new build mortgage deposit for self-employed people can take a bit more preparation than a standard purchase.
Use our Mortgage Repayment Calculator to find out how much your mortgage payments are likely to be based on interest rates and terms.
New build schemes that could help you buy
Scheme | How it works |
First Homes | Eligible first-time buyers and key workers can buy some new build homes for at least 30% less than the market price. |
Shared Ownership | Buy a share of a new build home (usually between 10% and 75%) and pay rent on the remaining share. You can increase your share later on. |
Own New Rate Reducer | A developer incentive that can reduce your initial mortgage payments. |
Availability and eligibility vary by developer, lender and your circumstances.
Use a mortgage adviser who specialises in new build
Just like new build homes, new build mortgages have their own quirks. An adviser who knows this market can save you a lot of stress. They'll know which lenders are comfortable with new builds. They'll know who offers better rates or higher LTVs for this property type. And they'll help you hit tight deadlines.
Use our Affordability Calculator to see how much you can afford to borrow.
New build exchange deadlines
This part really matters. Developers usually set a deadline to exchange contracts, often around 28 days after reservation. Most mortgage offers only last three to six months.
If building work runs late, your mortgage offer might run out before you complete. You may then need to apply again, sometimes at a different rate. But don’t worry – a good adviser will help you time your application to avoid this. They can also help you extend or renew an offer if needed.
Use a mortgage broker to choose the right lender
Every lender has its own way of assessing whether you’ll be right for a mortgage, unfortunately that’s one of the drawbacks of being self-employed. Trying to find the right path on your own can feel like guesswork.
Working with a new build mortgage broker for self-employed buyers can save you time, stress and money. They can point you towards lenders who fit your situation from the start.
Something to bear in mind...
FAQs
Yes. Being self-employed doesn't mean you need a special mortgage. You'll have access to the same deals as employed buyers – the difference is that lenders assess your income differently. The new build property you buy will also have to meet the lender’s lending criteria.
No, you don't have to use the developer's mortgage adviser. Choosing an independent broker gives you access to a wider range of lenders, rather than just those the developer works with. If you're self-employed, they can also help match you with lenders that are more comfortable assessing your type of income.
Yes, it's possible, though your options may be more limited. Some lenders accept one year of accounts, especially with strong income and a clear trading history. A specialist adviser can help find the lenders most likely to say yes.
No. Being self-employed doesn't automatically mean you need a bigger deposit. But buying a new build property usually means you need a larger deposit.
Don’t worry, a drop in income doesn't always mean your mortgage application will be rejected. Some lenders average your income over two years, while others use your latest figures. If the fall was temporary, such as investing in your business, we can explain this to the lender.
Yes. Self-employed buyers can apply for homebuying schemes the same way employed buyers do.
Not necessarily. As a self-employed first time buyer new build purchases can mean lenders look closely at both your income history and your deposit. Many first-time buyer schemes and new build incentives are still open to you, and a broker can help match you to lenders comfortable with both.