We’ve all heard it, the story of a talented professional who takes the leap, sets up on their own, and suddenly finds themselves shut out of the mortgage market.
Despite strong earnings and a thriving business, they’re told “come back in three years.” At Dudley Building Society, we think that’s not just outdated, it’s unfair.
Self-employment has exploded in the UK over the past decade, with around 4.43 million self-employed workers now contributing to the economy. Many of these are highly skilled professionals such as consultants, creatives, tech specialists, tradespeople, whose income might not come wrapped in a payslip, but is no less stable or sustainable.
Yet the mainstream mortgage market continues to put barriers in front of these borrowers. One of the most persistent? The expectation of three years’ worth of accounts.
That might have made sense in the past. But in today’s more agile, digital, and entrepreneurial world, it simply doesn’t reflect how modern businesses and modern borrowers operate.
Why we accept just one year’s accounts
At Dudley, we’ve always believed in doing things differently. That’s why we accept just one year’s accounts from self-employed applicants, there are some LTV restrictions but that’s to be expected.
It’s not about being reckless, far from it. It’s about being realistic. We assess every case on its own merits, looking at the full picture: the applicant’s industry experience, projected income, professional qualifications, business performance, and crucially their story.
For many new business owners, that first year isn’t just a test run. It’s often their most ambitious and driven period. With the right preparation and a solid business model, one year’s performance can tell us far more than a historical average.
Rethinking the “three-year rule”
The mortgage market’s reliance on the three-year benchmark has become a lazy proxy for security. But what it often ends up doing is penalising progress.
Imagine turning away a borrower whose business has grown rapidly in year one, simply because they haven’t been trading long enough. Or worse, averaging their first modest year against subsequent years of growth, effectively undervaluing their current income.
This isn’t about taking unnecessary risks. It’s about updating our approach to match the modern economy.
Supporting small business is supporting economic growth
Small and micro-businesses are the lifeblood of the UK economy. If lenders can’t find ways to support them, or worse, actively exclude them, we’re doing more than just limiting homeownership. We’re stifling innovation, enterprise, and national growth.
Lenders like Dudley have always played a role in championing underserved communities. That includes the self-employed.
By lending more flexibly, with understanding and care, we can help more of these individuals and families buy their first homes, move up the ladder, or simply access the products they deserve.
A call to the wider market
The self-employed community isn’t a niche. It’s a cornerstone of the modern economy.
Lenders need to stop treating them like an exception and start building products, policies, and underwriting approaches that serve them properly.
That begins with rethinking the outdated insistence on three years’ accounts and recognising that in today’s world, one good year can say a lot more than three average ones.
It’s time the mortgage industry caught up.
Rob Oliver is distribution director at Dudley Building Society
