Self-Employed mortgage brokers in Portsmouth

Self-Employed mortgages in Portsmouth: what to know

Self-employed applicants are not treated worse than employees, but they are assessed differently. Lenders want to see a track record — usually two years of accounts or tax calculations, occasionally one — and they differ substantially in what income they will actually count. Sole traders, company directors and contractors are each assessed on a different basis. For self-employed borrowers in Portsmouth, choosing the right lender is often the difference between a comfortable approval and a decline.

• Sole traders are generally assessed on net profit; company directors on salary plus dividends, though some lenders will use salary plus retained profit, which can be far more generous.
• Day-rate contractors are often assessed on an annualised day rate rather than accounts, which frequently produces a much higher borrowing figure.
• Most lenders average the last two years, but some use the most recent year alone. If your income is rising, that difference is significant.
• Aggressive expense claims reduce declared profit and therefore borrowing power. It is worth understanding that trade-off with your accountant well before you apply.

What matters locally in Portsmouth

Southsea holds the strongest owner-occupier and rental demand, with Victorian terraces and a large number of period conversions into flats. North End, Fratton and Copnor are the mid-market terraced districts where most first-time buyers land. Cosham, Drayton and Farlington sit off the island with more interwar semi-detached stock. Old Portsmouth and Gunwharf add higher-value apartments. Coastal position matters: flood risk and salt exposure appear on valuations regularly, and the island geography means very little new-build land, so conversions and flats above commercial premises are a larger share of the stock than in comparable cities.

• Flats above shops and commercial premises along the main roads, which many lenders restrict or decline.
• Flood risk on low-lying island addresses, where insurance availability determines whether a lender will proceed.

Questions worth asking a self-employed broker

How many years of accounts do I need in Portsmouth?

Two years is the common requirement. A smaller number of lenders will consider one year, usually with a larger deposit or where you were previously employed in the same line of work.

What income will a lender actually use?

It depends on your structure. Sole traders are typically assessed on net profit, company directors on salary plus dividends, and some lenders on salary plus retained company profit. Contractors are frequently assessed on an annualised day rate.

Do I need my accounts signed off by an accountant?

Most lenders accept SA302 tax calculations with the corresponding tax year overviews from HMRC. Some also want accounts prepared by a qualified accountant, particularly for limited companies.

Can I get a mortgage in my first year of trading?

It is difficult but not impossible, especially if you moved from employment into self-employment doing similar work. Expect a narrower lender pool and a larger deposit requirement.