Buy to Let Self-Employed
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Buy to Let Self-Employed
Lee Sutton explains how a Buy to Let mortgage works for the self-employed.
Can you get a Buy to Let mortgage if you are self-employed? Are there Buy to Let mortgages for self-employed applicants?
Absolutely, you can get a Buy to Let mortgage if you’re self-employed.
For a lender to agree to a Buy to Let mortgage, they want to see what your income is, to make sure the loan can be repaid each month. The loan itself is generally covered by the rental income.
Lenders want to see your income, firstly to see which tax bracket you’re in. We’ll probably talk about this later, but they want to make sure that the mortgage is affordable, allowing for tax. They also want to see that you have an income in case there’s no tenant and no rent coming in at any point. It’s a safety check.
How is Buy to Let mortgage eligibility and affordability assessed when you’re self-employed? How will my income be assessed?
The application will be reviewed, assessed and underwritten as for any other borrower. You’ll need to provide evidence that you earn something – generally in the form of the last two, or possibly three, SA302 forms – your tax year overviews and tax computations.
Some lenders have a minimum income requirement, where you need to earn £25,000, for example. Other lenders don’t have that minimum income requirement. As long as you have some form of income, that’s fine.
It’s just a safety check on their part, so that if there isn’t a tenant in the property, you can still make those mortgage payments. You generally have to be a UK-resident, but you don’t have to already be a property owner – an owner-occupier. There are lenders out there that are happy to accept first-time buyer, first-time landlords.
For a first-time buyer, it’s just underwritten like a standard mortgage. The lenders do credit checks and make sure you’re suitable to lend money to.
What deposit will I need and how much can I borrow for a Buy to Let mortgage?
Generally, you need a 25% deposit, although things are changing at quite a rapid pace and you may find the occasional option with 20% deposit.
On a normal mortgage, you’d be able to borrow between 4.5 and 5.5 times your income – but that goes out of the window with Buy to Let, because lenders are looking at the rent. That rent needs to pay the mortgage, and there needs to be a surplus, known as a rental stress test.
Depending on your tax bracket, the stress test needs to cover 25% or 45% beyond the mortgage payment. As long as the rent stacks up, a 75% Loan to Value is normally the limit.
Do many Buy to Let lenders specialise in self-employed mortgages?
Not really. Most lenders will offer Buy to Let mortgages to self-employed applicants.
What should self-employed applicants consider when purchasing a Buy to Let property? Should I Buy to Let as an individual or through a limited company?
I can’t really give a definitive answer on that – I would always recommend you speak to an accountant who’s knowledgeable in tax affairs. They will explain whether to buy a property in your personal name or through a limited company.
It often depends which tax bracket you’re in. For somebody paying 40% tax, there would certainly be some tax advantages through a limited company, whereas someone who’s paying 20% might not need those tax breaks. Speak to an accountant to see which is the best plan of attack.
It also depends on your goals. If you’re just looking to get one or two properties as a 20% taxpayer, depending on the rent you achieve and how you want to take the income, it might not be necessary to go down the limited company route.
If you’re a 20% taxpayer now but you’re looking to build up a portfolio of properties, the limited company options might be worthwhile. One advantage of the limited company is that the stress test for the rent is lower, so theoretically, you could borrow more.
There are also tax breaks, where you can offset mortgage interest and other costs against the rent. So there’s tax efficiency and also, going forwards, there’s inheritance planning. If the director of the limited company has kids, they can add them into the company as an inheritance strategy.
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What if I only have one year’s accounts? Can I still get a Buy to Let mortgage?
You can indeed. There are lenders out there who will accept people with one year’s accounts. You don’t always have to meet a minimum income as long as you have something.
The lender just needs to do their due diligence to ensure the borrower can pay the mortgage should there not be a tenant in the property.
What is a special purpose vehicle (an SPV)?
It’s a type of limited company set up specifically to own property. It’s not a trading company. It’s there to own property, receive rent and take the profit from property letting.
What is top slicing?
Top slicing is where an applicant can use their earned income from self-employment to top up any shortfall on the rent.
For example, if there was a £50 monthly shortfall in the rent required to support the mortgage, the lender could utilise your surplus income to cover that gap.
What are the tax implications with self-employed Buy to Let?
Again, speak to an accountant. In the Autumn 2025 budget there were some changes in this area. Lenders might be comfortable with something when you take out a mortgage, but obviously the budget changes things. It’s not for me to give advice there – so talk to an accountant.
Can I remortgage a Buy to Let if I’m self-employed?
There are no differences if you’re self-employed. It’s exactly the same. Whether you’re self-employed or employed, you can remortgage your Buy to Let property.
Can I still get a Buy to Let mortgage if I’m self-employed and have bad credit?
Yes, although it would depend on what the credit issues were, plus the size and type. It could be a County Court Judgment (CCJ), a default or bankruptcy. We would need to know how long ago they were registered and what the underlying story was.
There are lenders out there who would offer you a mortgage, but you might pay a slight premium on the rates. Nothing’s impossible.
How long is the Buy to Let mortgage application process?
From applying to getting the keys to the property, allow about two months. That’s pretty standard.
It’s normally the solicitor that dictates the pace of the transaction. We can get a mortgage offer issued fairly quickly, and then it’s down to the legals. It can sometimes be more complex if you are buying through a limited company, and sometimes either the lender or the solicitor will say you need separate, independent legal advice. Technically, the limited company is getting the advice because they’re the entity that’s purchasing the property.
How can a mortgage broker help self-employed applicants?
With our experience and market knowledge, we can help self-employed clients understand exactly what to expect and which documents will be required. We can get everything in place before the application is submitted, to make it a smooth and painless experience for you.
We work with solicitors, accountants, the lender and the valuer. Should any problems arise or if the lender asks for any additional documentation, we’ll get all of that in place for you.
We’ll manage everything from start to finish and make sure your mortgage gets completed.
Key Takeaways:
- Being self-employed does not prevent you from getting a Buy to Let (BTL) mortgage; most lenders offer them.
- Lenders primarily assess the loan’s repayment via rental income, but they also check the applicant’s self-employed income (usually two to three years of SA302 forms) as a safety measure in case the property is vacant.
- A 25% deposit is generally required, though 20% options may be available. Borrowing capacity is determined by a rental stress test, where the rent must cover the mortgage payment plus a surplus (25% or 45% depending on the tax bracket).
- The decision of whether to buy as an individual or through a limited company depends on your tax bracket and portfolio goals. It is highly recommended to consult an accountant for tax advice, as a limited company can offer tax advantages and a lower rental stress test.
- The application process typically takes about two months, with the solicitor often setting the pace. A mortgage broker can assist self-employed applicants by gathering necessary documents and managing communications with all parties involved.
A fee may be payable if we progress your application. Our average fee is around £200 and the maximum you may pay is £995 for Retirement Interest Only mortgages.
Mortgage Style Ltd, trading as Mortgage Style, is an appointed representative of HLPartnership Limited, which is authorised and regulated by the Financial Conduct Authority.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE SOME FORMS OF BUY TO LETS. YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE REPAYMENTS.