Simply Business - Insurance for your business

Call Us0333 0146 683
Our opening hours
Knowledge centre

Self-employed buy-to-let: what you need to know

3-minute read

Self-employed buy-to-let: what you need to know
Bonny Dellow

Bonny Dellow

20 February 2017

Despite a number of buy-to-let changes in recent times, becoming a landlord can still be extremely rewarding and profitable. But becoming a landlord when you’re self-employed isn’t always easy.

Lenders will often require the self-employed to jump through a number of hoops before offering a mortgage, and that may mean the process is a little tricker than if you were employed.

But the good news is, getting a self-employed buy-to-let mortgage isn’t as difficult as it used to be. Lenders are becoming more receptive to a growing customer base and, as such, options are expanding.

Get your paperwork in order

Whether it’s your annual tax return or the latest invoice, it’s fair to say that the self-employed are used to dealing with their share of paperwork. And it’s no different when applying for a mortgage when self-employed.

Unfortunately, you’ll probably need to present a lot more documents to a lender before being approved for a mortgage than if you were employed.

Here are some of the documents that you’re likely to need when applying for a self-employed buy-to-let mortgage:

  • Company accounts dating back three years (although more and more lenders are accepting one or two years’)
  • Bank statements
  • SA302s (evidence of your earnings from your self-assessment) for the last three years
  • Proof of your deposit
  • Evidence of your address
  • Photo ID

Self-employed mortgage advice

Before going straight to the banks, it might be worth speaking to a specialist buy-to-let mortgage broker or advisor.

They can help with everything from affordability to advising you on the best course of action for your circumstances.

Keep in mind, however, that acting through a broker is likely to cost you.

What about self cert mortgages?

Another option for the self-employed - especially if they’re struggling to get a buy-to-let mortgage is to look into self certification mortgages.

However, borrowers should be aware of the potential risks, and indeed the Financial Conduct Authority has issued a warning about getting this type of mortgage - but more on that in a second.

What is a self cert mortgage

Self cert mortgages are designed for borrowers who might struggle to prove how much money they earn. In practice, they take the borrowers’ word on how much they earn. You can specify your annual income without having to provide any supporting documents.

These can be useful for people who make the majority of their income through commission, or have a variety of income streams. They’re also designed for the self-employed.

What are the risks of a self cert mortgage?

Since 2011, self cert mortgages have been banned in the UK, with concerns that lenders were offering mortgages that their lenders couldn’t afford.

FCA rules state that lenders must conduct in-depth affordability checks whenever someone applies for a mortgage, and with self cert mortgages, this testing is significantly less thorough.

It is possible, however, to apply for a self cert mortgage online through a European lender.

But keep in mind, your mortgage would not be regulated by the FCA, and would come with much less protection should things go wrong.

If you decide a self cert mortgage is for you, it’s still best to talk to a UK mortgage advisor to analyse the risks. You should also research your lender thoroughly.

Things to keep in mind

  • Your SA302s can take weeks to arrive from HMRC, who post it manually. Keep this in mind with the timeline of your application.
  • If you’re still employed, but looking to become self-employed in the near future, act now. Many lenders will require the self-employed to have been trading for a certain period and this can be up to as long as two years.
  • Being a director of a limited company will not be classed as being employed in the eyes of most lenders.
  • Some lenders will have minimum income requirements, and these can be for individuals or couples.

Have you found it tricky getting a buy-to-let mortgage as a self-employed person? Let us know in the comments.

Get set with tailored landlord cover

Over 200,000 UK landlord policies, a 9/10 customer rating and claims handled by an award-winning team. Looking to switch or start a new policy? Run a quick landlord insurance quote today.

Start your quote

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.


People also liked

A simple guide to business credit scores.

22 February 20172-minute read

A simple guide to business credit scores

Find out what a business credit score is, why’s it important and how you can view and improve your business credit score. If you’re a sole…

Read more

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


Popular articlesBusiness resources from FarillioGeneral businessGuestInsuranceLandlordLandlord resources from FarillioLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.