Buy to let mortgage for self-employed borrowers

Yes. A buy to let mortgage is assessed mainly on the expected rent, tested against the mortgage interest at a stressed rate, and banks and building societies follow the Prudential Regulation Authority's (PRA) buy to let underwriting standards. Self-employed income matters where a lender sets a minimum personal income or lets personal income top up a rent that falls short, and it is evidenced in the usual way, with tax calculations or accounts. Most buy to let lending is not regulated by the Financial Conduct Authority. In our experience buy to let lending goes up to 85% loan to value, so the deposit is at least 15%.

Some buy to let lenders accept one year of self-employment, because the loan is assessed mainly on the rent. Banks and building societies test the rent against the interest at a stressed rate under the Prudential Regulation Authority's underwriting standards (PRA: SS13/16), and other lenders set their own tests. Some lenders also look at personal income, for a minimum income rule or to support the rent, and some want two years of self-employed figures where they read that income at all. In our experience most lenders no longer set a minimum income of £25,000. Most buy to let mortgages are not regulated by the FCA.

You usually need HM Revenue and Customs (HMRC) tax calculations (SA302) and the matching tax year overviews for one or two years, business and personal bank statements, proof of identity and address, and evidence of your deposit. Company directors assessed on a share of profit, and partners, usually add the company or partnership accounts, and some lenders ask for an accountant's certificate. Contractors assessed on a day rate give their current contract, and Construction Industry Scheme subcontractors give their payment and deduction statements. Where your last return is old, current-year figures such as management accounts can help.

A company director is treated as self-employed for a mortgage once their shareholding reaches the lender's own line, and is usually assessed as employed below it. Each lender sets that line: in Mortgage Lane's experience some lenders disregard shareholdings under 19% and some disregard holdings of 24% and below. A director assessed as employed is read on payslips, P60 end of year certificates and an employer's reference. Some lenders also count shares held by a spouse or another family member when deciding who controls the company.

Yes, provided the income can be evidenced and the case fits a lender's criteria. Lenders read the income from HM Revenue and Customs (HMRC) tax calculations and tax year overviews, company or partnership accounts, a contract or Construction Industry Scheme statements, usually for one or two years. The method depends on whether you are a sole trader, a partner, a company director, a contractor or a CIS subcontractor, and lenders differ on which figure they use, so the same business can support different loans at different lenders. A regulated lender must see evidence of the income it relies on and cannot accept a borrower's own statement of it.