Mortgage for Self-Employed Construction Worker
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Mortgage for Self-Employed Construction Worker
Adam Messer explains how the mortgage process works for self-employed construction workers. [Podcast recorded September 2025]
What challenges do self-employed construction workers face when applying for a mortgage?
The biggest thing is time in self-employment. Having a year’s accounts or less is a challenge. Some people still think you need three years’ history, but that’s not the case these days.
Another challenge is being paid in cash, which people commonly used to do in this industry. We’re certainly not encouraging anyone to do this, but in the past we’ve found that sometimes not all that cash goes through the books.
But if it doesn’t go through your accounts, your profit looks lower than it should – which impacts how much you can borrow. Putting through a lot of expenses can affect that as well.
We’ll talk about Construction Industry Scheme contractors in a moment, but CIS can help with how certain lenders look at you.
What documents are required for a mortgage if I’m self-employed in construction?
This will vary depending on your type of self-employment. If you’re part of the Construction Industry Scheme (CIS), we can just look at payslips and bank statements.
You’ll get a CIS payslip each week or month – we’ll need three months of those, at least, and the bank statements that show that money going in. If you’re a CIS worker, this is usually the best approach as it gives you the most money.
If we look at you as a sole trader, you’ll have your income, but once you take out expenses your net profit ends up being lower. Using CIS pay is often better.
If you’re not CIS, we’re looking at that net profit, so we’re going to want your SA302s or tax calculations to give us an income figure. We always need bank statements and ID, too.
For a limited company director, it’s a little different. We probably need the same SA302 tax calculations, and we might want your accounts as well – as potentially we can use your profit rather than what you’ve paid yourself.
There are different ways of looking at it depending on how your self-employment is set up.
How many years of accounts or tax returns do I need? Can I get a mortgage if I’ve been self-employed for less than a year?
If you’re a CIS worker with less than a year’s records, yes, potentially. We just need your CIS payslips.
If you’re not CIS and we’re looking at you as a limited company or a sole trader, we’re usually going to need a couple of years. That’s the case with most lenders. However, if you’ve only got one year that could potentially be okay – depending on what you’ve done before, there are potentially a few high street lenders to approach.
Perhaps you’re an electrician that’s gone from employed to self-employed and you’ve got one year’s accounts – in that case a mortgage is definitely an option. But on the whole you need two years.
It does vary. If you’ve not got two years, get in touch because we can possibly still help.
Many people are CIS and don’t realise they can use their CIS payslips without waiting for two years’ figures.
Do I need to be registered as a sole trader or a limited company? Is it easier to get a mortgage as a limited company director or sole trader?
It’s fine to get a mortgage either way. We just use slightly different figures and need different income evidence, that’s all.
You’ve probably got more options as a company director – we’ve got lots of content about limited company directors. For directors, we can use your salary and dividends or we can use the profit from the business plus your salary.
If you’re a sole trader, we’re just looking at your net profit – unless you’re CIS. No route is easier than another. It’s just different.
How do lenders calculate income for self-employed construction workers?
It’s similar for any mortgage. We’re going to take your income figure: your net profit or CIS income.
As a side note, with CIS income we look at it over 46 weeks of the year. Lenders allow for some time off – you get paid a weekly amount, but not 52 weeks of the year. So we won’t quite take a full year’s worth.
Based on your salary and dividends or your profit, whichever figure we’re using, we give the lender that number and they calculate how much you can borrow. Some lenders are more generous than others for the self-employed or company directors – so the lender we aim for is important.
They’ll work out how much you can borrow in the same way as for anyone else. They factor in other commitments like loans, debts, credit cards, cars and children as normal.
Can I use retained profits or dividends as income?
Yes – either or both, whichever’s better. Most lenders default to salary and dividends, as typically a company director pays themself a small salary of £12,000 or so, and takes the rest as dividends.
But a few lenders can use your profit. If your business makes £100,000 a year profit but you only pay yourself £50,000 to not be a higher rate taxpayer, we can still use that £100,000 with certain lenders.
Will irregular income or seasonal work affect my mortgage application?
Not necessarily. It depends how you run it. Not everyone works every day of the week, every week of the year. You might have a really busy few months and then a quiet few months. That’s not a problem.
When you’re self-employed, lenders look at your annual income. That’s why we look at the accounts or tax calculations, because that’s your whole year’s income.
COVID is a distant memory now, touch wood, so lenders are less likely to ask for business bank statements. There was a time when we had to get three months’ statements to show the business was still trading in line with the figures we wanted to use.
Some lenders still want that, but not all of them. We could come unstuck there. If you worked nine months a year and then had three months off, and that happened to be the most recent three months, that would be an issue.
But generally if everything adds up and you’ve had a couple of consistent years, even if you just work when you want to, it’s fine. We’re taking the annual income, however it comes in.
How much can I borrow as a self-employed construction worker?
It depends on your income, how we use that and which lender we go to. It’s very bespoke – the most important thing is knowing which lenders to start with.
What if my most recent year’s income is lower than the previous years?
It does happen. Sometimes it’s very similar – perhaps £32,000 last year and £31,000 this year. That’s fine. Or it might be more dramatic, like £90,000 last year and £30,000 this year.
Lenders are always going to look at the average of the last two years or the latest year – whichever is lowest. Some lenders don’t average and just use the latest year. If your income has gone down, they’re going to use the lower figure.
If it’s gone down a significant amount, they might ask questions about how sustainable that is. Is this a downward trend? Is next year going to be lower as well, or is it a blip?
It doesn’t mean we can’t get a mortgage – just that we’ll use the latest figure rather than an average.
Which mortgage lenders accept self-employed construction workers – do many? Are there specialist lenders or brokers for self-employed mortgages?
As brokers, we can all do all types of business. We just aim for this area because we do a lot of it. We’re used to dealing with this, so you could say we’re specialists in this field.
There are some specialist lenders, but we ideally want to avoid those because they normally come with a specialist rate attached. We’d prefer a nice, normal lender.
It’s just about knowing which lenders to go to. Some are better set up and their criteria is just more accommodating for company directors, CIS or sole traders. They all have different focuses and cases that they like.
Is there anything else we need to know about getting a mortgage as a self-employed construction worker?
It’s probably come across already, but in cases with any complications at all – like self-employment – Google can’t necessarily tell you which lender’s best. They’re all very different and they each have their own criteria. So speak to an expert, I would say.
Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
For specialist tax advice, please refer to an accountant or tax specialist.
The information contained within this article was correct at the time of publication but is subject to change.
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Mortgage for Self-Employed Construction Worker (Part 2)
Adam Messer is back to continue the conversation on mortgages for a self-employed construction worker. Episode two of two, recorded in October 2025.
Do I need a strong credit score as a self-employed construction mortgage applicant?
A strong credit score is always better for any mortgage. If you’re self-employed, certain lenders probably prefer you to have a slightly better credit score than if you’re employed.
That’s not necessarily the case with all lenders. Some are better set up for the self-employed than others. But you don’t have to have a strong credit score – there are lenders we can go to with even the worst credit scores.
It could be that for two people with identical credit, where one’s employed and one’s self-employed, the self-employed person might not be looked at as favourably. But I wouldn’t let that put you off.
We would choose mainstream lenders unless you’ve got any major credit issues. Just having a lower score isn’t the end of the world for anyone – self-employed or otherwise.
Can bad credit impact my ability to get a mortgage while self-employed?
Yes, it can, and it depends how bad. We’ve got a lot of content about bad credit – and I always say the same thing. It really does depend.
One missed credit card payment from three years ago isn’t going to have any impact at all. But two CCJs and three defaults last month is very bad – that definitely will have an impact. It very much depends where you are on the spectrum of bad credit. There’s usually a place we can go, but it depends.
What is the minimum deposit required for self-employed construction workers?
It changes over time, but at the time of recording in October 2025 you can get a mortgage with a 5% deposit – as a self-employed construction worker or otherwise.
There might not be as many lenders that will accept a 5% deposit if you’re self-employed, but there are certainly some we can go to.
The more deposit you’ve got, the better. The rate gets better when you get a 10% deposit. After that, it gets better at every 5% increase, but not by much.
Are there specific mortgage deals for self-employed construction workers?
Lenders don’t do really specific deals for specific types of clients. A few lenders do have professional products for doctors and teachers, for example, but these are few and far between. At the moment there’s only one lender I can think of.
If you meet their criteria, you could have a product from their range, depending on your deposit level. But there’s nothing specific for self-employed people, generally.
Can I apply for the shared ownership scheme as a self-employed construction worker?
Yes, there’s no reason why not. We actually don’t do a huge amount of shared ownership mortgages, but I have never seen any criteria to say you can’t.
From a mortgage point of view, it’s certainly possible. Different housing associations have different rules and their own affordability checks, and you have to get through their affordability as well as the lender’s. There’s no restriction on employment type, as long as your income is evidenceable.
Should I go for a fixed or variable rate mortgage as a self-employed construction worker?
I get similar questions most days, and I can never really give an answer because it depends. It depends what the rates do, and obviously we can’t predict that.
Fixed versus variable depends on your attitude to risk, and so does the length of your fixed term – whether you choose two, three, five or 10 years.
A variable rate might start off a little bit higher, but if rates go down, you may be thankful. At the moment, they’re not going down particularly quickly. Most people tend to prefer the stability of a fixed rate, and whether you’re employed or self-employed probably doesn’t affect your attitude to that.
People tend to go for stability, but that doesn’t mean it’s the right way to go. It’s different for everyone. We certainly do some variable mortgages – but your employment status wouldn’t necessarily dictate which is best.
Can I combine my self-employed income with my partner’s income?
If you’re doing a joint mortgage application, yes, we’ll absolutely use both incomes. You can’t do a mortgage just in your name and use anyone else’s income. We can only use people’s income if they’re on the mortgage. But if it’s a joint mortgage, then yes, absolutely.
Can I use income from subcontracting, PAYE work or ‘side jobs?’
Yes, all those incomes can be used. You have to be careful about side jobs – but it’s tricky to word this without insinuating that people might not tell the taxman if they get paid in cash. Obviously, you shouldn’t do that – and we also can’t use that for a mortgage. We can only use income that HMRC knows about.
Tradespeople do get paid in cash, and as long as that’s paid into the bank and you put it on your tax return, it’s usable income. Not all lenders like cash payments but some cash is generally okay.
With subcontracting, it depends how that’s set up. We’ve done a podcast for people in the Construction Industry Scheme (CIS) which might be relevant. Self-employed subcontracting is absolutely fine.
We can also use PAYE income, but it’s very different. With self-employed income, we’re looking at your history – the latest year or two. With employed income, we’re looking at the here and now. So if last year you did some PAYE work and some self-employed, we can only use the self-employed. I can’t use the PAYE unless it’s currently happening – not historic PAYE.
How can I improve my chances of getting approved for a mortgage as a self-employed construction worker?
Preparation is key. Make sure your income is structured right and your tax returns are done. If you’re in a self-employed trade where you have some leeway on how many expenses you put through, remember that more profit means more borrowing.
Make sure your latest set of accounts is done, because we’re always going to need the latest figures. Although you don’t have to have it done until January, you might be applying for a mortgage in October, in which case the previous year is more than 18 months old. That’s a handy hint if you’re self-employed and listening to this around October.
Keep your credit tidy as well, which also takes preparation. Don’t miss any payments and keep credit card balances to a minimum. Have some credit, by all means – there’s no problem with that as it shows you can manage it, but keep it to a minimum, ideally.
Next, get your deposit in order. That’s the big one – make sure that’s all ready to go.
How long does the mortgage process typically take for self-employed construction applicants? Is there any difference?
It’s the same, as long as we’ve got the relevant documents and you’ve done your tax returns, because we can’t submit a mortgage application until we’ve got all those things.
We could be speaking for weeks and months about this. It might feel like it’s taking a long time when we’re just waiting for your documents. But once we’ve got everything and submit a mortgage application, it’s just a couple of weeks, normally.
It can be done much quicker than that – it depends on the lender’s timescales and if we need a valuation. Some lenders will do a desktop valuation – especially if you’ve got a big deposit or it’s a remortgage with lots of equity.
There can even be auto-income checks, because they can view HMRC records and bank statements online. It can be very quick, or it can take a few weeks – especially if it’s complicated, or there are incomes from different places and questions from the lender.
Generally, I wouldn’t expect a normal mortgage application to take more than a couple of weeks.
What are the most common reasons for rejection on a mortgage for a self-employed construction worker?
We don’t often get cases rejected once we’ve submitted them, because we know what we’re doing. We know what the lenders are going to look at, what figures to put in and what evidence they need to justify those figures.
We wouldn’t do an application with a lender without checking whether it’s going to go through. If you were applying yourself, it’s possible you could use the wrong number somewhere. Perhaps the lender wants evidence of your income and they’re looking at a different figure from you.
Self-employed people sometimes think they can use turnover instead of profit. Turnover is the money that comes in, which is great – but if you have £100,000 coming in your costs are £99,000, we’re using £1,000, not £100,000. That’s sometimes a misconception with the self-employed, but not that often.
Beyond that, if you’re using a sensible mortgage broker like us, you shouldn’t be rejected. Once it’s submitted, people may find they can’t borrow as much as they want – but we would know that before we submit anything.
Can I remortgage or get a Buy to Let mortgage as a self-employed construction worker?
Yes to both. A remortgage is just moving from one lender to the next. We would generally do that every time your current rate ends – we would line you up with another lender. Sometimes you’ll want to borrow more at that point – perhaps to get a Buy to Let, which is something we do a lot of.
A Buy to Let mortgage is much less about your income, and much more about the property and the rent. You often still need a certain level of income, but equally often there’s no minimum. You can absolutely get a Buy to Let mortgage, as long as you have the deposit – that’s key. We have lots of content on Buy to Let if you want further details.
What else do we need to know about mortgages for a self-employed construction worker?
The lenders are looking for quite specific things. We know what they want and what to show them. It’s also important to go to the right lender, particularly if you’ve got complex income.
It’s very important to make sure we’re going to the right lenders and saying the right things – and that’s why you need a mortgage broker.
Key Takeaways:
- A strong credit score is always better for any mortgage, but there are lenders for those with lower scores, even for self-employed individuals.
- Bad credit can impact mortgage approval, with the severity of the impact depending on the nature and recency of the credit issues.
- A minimum 5% deposit is possible for self-employed construction workers, but a larger deposit generally leads to better rates.
- Lenders do not typically offer specific mortgage deals for self-employed construction workers, with only a few professional products available for specific professions.
- Preparation is crucial for improving mortgage approval chances, including structuring income correctly, timely tax returns, keeping credit tidy, and having the deposit ready.
Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
For specialist tax advice, please refer to an accountant or tax specialist.
The information contained within this article was correct at the time of publication but is subject to change.
Useful Links
- Self Employed Mortgages
- Self-Employed One Year Accounts Mortgage
- Mortgage as a Sole Trader
- Mortgage for Company Director on PAYE
- Joint Mortgage Self-Employed
- Agreement in Principle Self-Employed
- Self-Employed Net Profit Mortgage
- Self-Employed Mortgage 2 Years' Accounts
- Mortgage for a Self-Employed Construction Worker
- Self-Employed Mortgage
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