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Securing a mortgage as a company director in London can be more complex than for salaried employees. Most lenders classify directors as self-employed if they own 25% or more of their company, meaning affordability is assessed differently. With London’s high property prices, working with the right mortgage broker in London is essential to access lenders who consider different income structures, including salary, dividends, net profit, and retained profits.
In this guide, we explore the key requirements for company directors looking to secure a mortgage in London
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How Do Lenders Assess Company Directors’ Income?
Most high-street lenders use a one-size-fits-all approach, calculating affordability based only on salary + dividends. However, some specialist lenders take a more flexible approach, considering net profit (before or after corporation tax) or retained profits, which can significantly increase borrowing potential.
For example, consider a company director earning £100,000 in profit but only drawing £50,000 (salary + dividends):
- Standard lender: Assesses income as £50,000 → Mortgage offer = £250,000 (5x income)
- Specialist lender: Assesses income as £100,000 → Mortgage offer = £500,000 (5x income)
The difference is huge, which is why choosing the right lender is critical—especially if you leave profits in your business for tax efficiency.
How is fluctuating income calculated?
Most lenders will assess your income based on an average of the last two years. However, if your income has been decreasing, they will typically use the most recent year’s figures. Some lenders may also consider only the latest year’s income, which can be beneficial if your trading history has been inconsistent.
For example, if you earned £100,000 this year and £50,000 the year before, most lenders would take the average (£75,000) and offer around 5x that amount, equating to a mortgage of approximately £375,000. However, some lenders may consider just the latest year’s income and lend 5x £100,000 (£500,000), which can make a significant difference in your borrowing potential.
How Much Can a Company Director Borrow in London?
In London, where property prices are high, many company directors need larger mortgage loans. Most lenders offer:
✅ 4.5 – 5x income with standard lenders
✅ 5.5 – 6x income with specialist lenders (considering net profit or retained earnings)
If you only withdraw a small portion of your company’s profits, working with a mortgage broker in London can help unlock a higher borrowing amount.
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Can You Get a Mortgage with Just 1 Year of Accounts?
Yes, it is possible to get a mortgage in London with only 1 year of trading history, but options are more limited. Most lenders prefer 2-3 years of accounts, but some specialist lenders may consider your application if:
✔ You have a strong financial track record in your industry (e.g., previously employed in the same sector).
✔ Your business shows strong growth and profitability.
✔ You have a larger deposit (10-25%) to reduce lender risk. Although it’s certainly still possible with less.
✔ You work with a whole-of-market mortgage broker to access specialist lenders.
If you have only 1 year of accounts, it helps to have:
- A large deposit (at least 10-15%)
- A good credit score
- Projections from your accountant showing sustainable income
Speak to an advisor today, to lock you in with the best deal.
How to Improve Your Mortgage Chances as a Company Director
✔ Work with a Specialist Mortgage Broker – A whole-of-market mortgage broker in London can find lenders who accept company directors’ complex income structures.
✔ Prepare 2-3 Years of Accounts – The more history you can show, the better. Some lenders accept 1 year, but rates may be higher.
✔ Maximise Declared Income – If planning to apply, consider increasing your salary/dividends for a year to improve affordability.
✔ Have a Healthy Deposit – A deposit of 10-25% can unlock better rates.
✔ Check Your Credit Score – A strong credit history improves mortgage approvals.
✔ Reduce Business Debts – High business loans can impact your borrowing capacity.
Required Documents for Company Directors
When applying for a mortgage as a company director, you may need some or all of the following documents:
- Two years’ full company accounts (If available)
- An accountant’s certificate (required by some lenders)
- Two years’ SA302s and tax overviews
- Three months’ business bank statements
These are required alongside standard documents such as proof of deposit.
Why Use a Mortgage Broker for Company Director Mortgages in London?
Navigating the mortgage market as a company director can be challenging, especially in London, where high property prices and lender restrictions make borrowing more complex. A mortgage broker in London can:
✅ Find lenders who consider retained profits & net profit
✅ Unlock high-income multiple mortgages (5.5-6x income)
✅ Help with specialist mortgages for self-employed buyers
✅ Advise on tax-efficient mortgage strategies
At Strive, we are experts in securing mortgages for the self-employed and limited company directors. With decades of combined experience, we specialise in arranging mortgages tailored to these professions.
Let’s help you secure the right mortgage for your needs!
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.
