Looking beyond the latest accounts for self-employed borrowers

Economic uncertainty continues to shape the outlook for many UK businesses.

Rising costs and fluctuating demand mean business owners are still navigating a challenging environment. While some firms are performing strongly, others are seeing margins squeezed despite maintaining healthy turnover and long-term prospects. 

Recent analysis from the EY UK Economic Outlook suggests growth has remained modest throughout 2026, with businesses continuing to face pressure from higher costs and a cautious investment environment. At the same time, the Bank of England has highlighted ongoing inflationary pressures linked to global energy markets, creating further uncertainty for businesses planning ahead.¹

For self-employed borrowers, this can sometimes be reflected in their latest accounts. A reduction in profit, a slower year of trading or a period of lower drawings may not tell the full story of a business. Yet these are often the figures that can have the greatest impact when applying for a mortgage. 

Taking the long view 

Many in the self-employed community have repeatedly demonstrated their resilience. Business owners have adapted to changing conditions by managing costs carefully, delaying expansion plans or retaining profits within the business to provide greater financial security. 

A single year's reduction in profits does not necessarily indicate a weakening business. In many cases, it reflects sensible commercial decision-making. Looking at the latest accounts in isolation risks overlooking years of successful trading and the wider financial position of the business. 

This is where experience and understanding matter. Brokers increasingly need lenders who can assess the full picture rather than relying solely on headline profit figures. 

Looking beyond net profit 

When reviewing a self-employed case, context is critical. Turnover, retained profits, cash reserves, forward order books and future earning potential can all help build a more accurate picture of affordability. 

A dip in profit may be the result of investment in staff, equipment or infrastructure. Equally, business owners have chosen to keep profits within their company rather than draw them as income, strengthening the business while reducing the income visible on paper. 

Understanding these nuances can make a significant difference to mortgage outcomes. 

Assessing the whole business story 

At Hinckley & Rugby for Intermediaries, we know there is value in considering the wider financial position of a business rather than focusing purely on the most recent year's profit figure. 

The self-employed market rarely fits neatly into a standard lending model. That's why we take an individual approach to assessing cases, considering factors such as trading history, business performance and the sustainability of income alongside the headline figures. 

Self-employed borrowers remain an important part of the UK economy and many continue to present strong lending opportunities despite recent challenges. 
As we move towards 2027, brokers are likely to continue seeing clients whose latest figures do not fully reflect their overall financial position. For those cases, taking a balanced view and understanding the context behind the numbers can often be the difference between an application that stalls and one that succeeds. 

Sources

¹EY UK Economic Outlook, Summer 2026. Economic momentum remains modest with businesses continuing to face cost and investment pressures. [ey.com] 

¹Bank of England Monetary Policy Committee Minutes, September 2026. Inflationary pressures and higher business costs remain factors affecting the UK economy. [bankofengland.co.uk]