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If you run your own business or work as a sole trader and don’t yet have two full years of accounts, you’re probably wondering what this means for your mortgage options. We specialise in mortgages for self-employed applicants, sole traders and limited company directors, and we’ve helped hundreds of clients secure homes over the last decade.
Most lenders still prefer two years of accounts — but there are exceptions. HSBC is one of the few big names willing to consider applicants with just one year. Here’s how it works, when it’s a good fit, and what the alternatives are.
How Long Do You Need To Be Self-Employed For HSBC?
As little as one year. That opens real options for buyers who haven’t filed a second year yet. It won’t suit every case, but it’s a genuine mainstream route rather than a niche workaround.
Key Eligibility Criteria
- Own at least 25% of the business
- Latest year’s accounts and matching tax return submitted
- Business trading profitably
- Deposit from 5% (subject to property and profile)
- Standard credit, affordability and residency checks
How HSBC Calculates Income
HSBC can assess director income as either:
- salary plus dividends, or
- salary plus your share of net profit
That second route is the headline benefit. Most lenders only use salary and dividends, which can penalise directors who retain profits in the company. HSBC will consider your share of net profit even if you didn’t draw it — and unusually they allow this with just 25% ownership (many lenders need 50%+ or 100%).
Example
- Company net profit: £100,000
- Director salary: £10,000
- Dividends taken: £40,000
A dividends-only lender might assess £50,000. HSBC may assess £110,000 (salary + share of net profit). That difference can materially increase borrowing power.
The Catch: One-Year Cases Are Often Averaged
Although HSBC can consider you with one year on file, they typically average over two years where available. If year one is effectively £0 and year two shows £110,000, assessed income could be treated like £55,000. It’s not as strong as having two profitable years, but for profit-retaining directors it can still beat a dividends-only approach elsewhere.
How Much Can You Borrow?
Indicatively 4.5 to 5.5 times assessed income. The 5.5× end is usually reserved for stronger overall profiles and larger deposits. If you only have one year and averaging applies, remember the usable income may be lower than your latest year headline.
Deposit, Property Types and Practicalities
Minimum deposits can start from 5%. In practice:
- Flats, new builds and certain construction types can require larger deposits
- Non-UK nationals and complex cases may see higher minimums
- A larger deposit often improves pricing and sometimes the multiple available
What Are The Rates Like?
Broadly in line with HSBC’s standard range for your loan-to-value and product type. That’s notable because most lenders who will consider just one year of accounts are niche or specialist and usually price higher to reflect perceived risk. HSBC is an exception: you get mainstream pricing with one-year eligibility (subject to criteria and affordability), rather than paying a premium just because you’re early in your trading history.
Speak to a mortgage expert today for the best deal.
Deposit, Property Types and Practicalities
Minimum deposits can start from 5%. In practice:
- Flats, new builds and certain construction types can require larger deposits
- Non-UK nationals and complex cases may see higher minimums
- A larger deposit often improves pricing and sometimes the multiple available
What Are The Rates Like?
Broadly in line with HSBC’s standard range for your loan-to-value and product type. That’s notable because most lenders who will consider just one year of accounts are niche or specialist and usually price higher to reflect perceived risk. HSBC is an exception: you get mainstream pricing with one-year eligibility (subject to criteria and affordability), rather than paying a premium just because you’re early in your trading history.
Documents You’ll Need
- One year’s finalised accounts and matching SA302/Tax Year Overview
- Three months’ personal and business bank statements
- Proof of deposit and source of funds
- ID and address verification
- Company documents where relevant (e.g. shareholding evidence)
Pros And Cons Of Using HSBC With One Year
Where it shines
- Will consider salary plus share of net profit with only 25% ownership
- Mainstream lender with competitive products
- Genuine route for applicants with one year filed
Potential downsides
- Averaging can dilute your latest year figures
- Standard underwriting still applies; affordability must stack
- Some cases fit better with alternatives that don’t average
Alternatives If HSBC Isn’t The Best Fit
Other lenders that may consider one year include names like Halifax, Kensington and Pepper. Some won’t average if there is no prior year; others lean on drawings/dividends. The “best” lender depends on how you pay yourself, how the business performed, and how quickly the numbers are growing. For broader context, see our guide:
Should You Wait For Two Years?
Not necessarily. If the numbers make sense now, it’s worth exploring. If averaging knocks affordability too far, a plan to apply after your second year is filed — or via a different lender — can pay off. A quick pre-assessment will show you the smart route.
Tips To Strengthen Your Case
- Keep business and personal banking tidy and consistent
- Be ready to evidence retained profits if using the profit route
- Reduce personal credit commitments where possible before applying
- Consider a larger deposit or longer term to ease affordability
- Explain any one-off costs or anomalies in the accounts
How Strive Can Help
We work with self-employed clients every day — from brand-new sole traders to growing limited companies. We’ll analyse how you pay yourself, model your options across lenders, and present your case in the strongest way. Whole-of-market access, broker-only products and a plan tailored to your timeline. If you want to see what’s possible with one year’s accounts — with HSBC or elsewhere — get in touch and we’ll map it out.
FAQs
Can I get a mortgage with just one year’s accounts?
Yes, with a handful of lenders including HSBC. Viability depends on profitability, income method, credit profile and deposit.
Will HSBC use my dividends or my profit?
They can use salary plus dividends or salary plus your share of net profit. The profit route often helps directors who retain earnings.
Jamie Elvin
Jamie is an expert in all things mortgages, and our most experienced broker. Connect with Jamie and get started to see how Strive Mortgages can help you.
