Self-Employed Mortgages for UAE Residents Acquiring UK Property

When arranging self-employed mortgages for UAE clients purchasing property in the UK, the way your broker negotiates with lenders depends on several factors, including your business structure, types of income, and length of trading history. These factors will determine lenders’ decisions regarding your borrowing limits.

Mortgages for limited company directors

Many of the directors of increasingly profitable companies do not take all their profits in salary, thereby decreasing the tax transferred to HMRC. This is fine; however, lenders will usually assess affordability and borrowing potential based on the salary you have declared. If, as a business owner or sole trader, you officially draw a modest salary, that will limit what you can borrow. Enness will study your company structure and present your profits over your salary to your lenders, which can significantly enhance your borrowing potential.

Considering year-on-year income growth  

Most lenders will examine your income over the last three years however if your business is done well with recent growth in your business you would be able to negotiate using more recent higher income figures than the last 3 years figures, for example the most recent 12-18 months, if you can demonstrate this sustained growth supported by financial documents. 

Utilising a company directors' loans

If you’re a business owner or sole trader and have used personal capital for your investment in the business, you may have used directors' loans. Lenders may not accept repayment of their directors’ loans as income. Although some non-mainstream lenders are willing to consider directors' loans in their affordability calculations, and Enness has relationships with these lenders, they will be able to position your application to its best potential, rather than its worst.

For UAE residents buying UK property, lenders will often take the view that self-employed income is often subject to a wider variance than salaried income. As such, affordability will need a more nuanced approach. Each lender has different criteria; however, they all now require an in-depth look at income, expenditure, and outgoings.

The strong point is that mortgages (or underwriting) for self-employed applicants have improved, apart from the usual paperwork, as long as you’ve got a broker who has a good depth of knowledge when it comes to self-employed mortgages.

While it used to be hard to be self-employed, in terms of mortgages, it’s easier now, and more importantly, you’re not limited to lenders who will see the whole picture and take a flexible approach.