Mortgage for Self-Employed Construction Worker

Podcast approved by The Openwork Partnership on 17/09/2025.

What challenges do self-employed construction workers face when applying for a mortgage?

Most often it’s getting hold of the CIS payslips. If you’re working for a small family firm, even though they’re meant to provide CIS payslips, they don’t always do it. That can be a bit of a challenge.

What documents are required for a mortgage if I’m self-employed in construction?

If you’re self-employed, working in construction and you’re paid through the CIS scheme, you’re going to need at least three months of CIS payslips.

You also need bank statements to show the pay going in and your day-to-day expenditure. Some mortgage lenders will ask for six months or even 12 months of both. On top of that, we need proof of your deposit and proof of who you are and where you live.

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 self-employed construction worker paid through the CIS scheme, you don’t need a single tax return. Mortgage lenders don’t ask for them.

What you need is just three months’ CIS records – which is great if you’ve just gone from employed to self-employed paid through the CIS scheme. Or, perhaps you were previously a self-employed sole trader, and now you’re paid through CIS as a self-employed construction worker.

And yes, you can get a mortgage if you’ve been self-employed for under a year if you’re on the CIS. You don’t need any self-assessments to prove your income – you only need to be a self-employed construction worker for three months on the CIS scheme to get a mortgage.

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?

You can be registered as either – a sole trader or a limited company director. If you’re paid through the CIS scheme into your limited company, that can be a tax-efficient payment route.

You’d probably take your tax free allowance as a salary, and then some dividends on top. Mortgage lenders are fine with that, as long as you own 100% of that company and you’re not employing anybody else.

That said, if you’ve got a limited company where your wife or partner is a shareholder or employee, that’s still okay as long as they’re named on the mortgage. If you’re buying with your wife and she’s a 50% owner in your company, we would put them down as a non-earner. Otherwise, we’re going to be using the income you’re paying her out of the company’s earnings – that’s basically using the same income twice, and obviously we can’t do that.

How do lenders calculate income for self-employed construction workers?

If you’re a self-employed construction worker paid through the CIS scheme, 20% tax is deducted at source. Mortgage lenders would look at the amount you’re earning per day or per week.

Let’s say you’re earning £100 a day as a labourer on site. That’s £500 a week and £26,000 a year. However, a mortgage lender wouldn’t use all of that £26,000 – because you’re going to take a couple of weeks off for Christmas, there’s around a week of bank holidays, and then you might have another week or two off during the year.

They therefore assume you’re going to work 46 weeks in a year, which would work out at about £23,000 income. That’s the amount that would be used for mortgage affordability. Your outgoings would also impact the amount that you can borrow.

Can I use retained profits or dividends as income?

We’re moving away now from being paid through CIS. If you’re set up as a limited company and you work in construction, there are mortgage lenders that can lend to you based on the retained profits in the business, plus your salary. We can use those to work out how much you can borrow.

Other mortgage lenders would use your dividends and salary drawn. What you can’t do is use retained profits and dividends – because there’s an overlap between the two of those.

I did a case for a general builder who ran a construction firm with his wife. They owned the firm 50-50 and they only drew out in salary and dividends what they needed for their household bills. They didn’t need to take more money out of the company, and they’d have to pay tax on it.

So the money was just building up as retained profit. They’d been to another mortgage lender that looked at it the wrong way – just their salary and dividends. When I took over the case we looked at those retained profits after tax in the company. We found a mortgage lender that was happy to accept those figures, and they could borrow significantly more than based on salary and dividends.

Will irregular income or seasonal work affect my mortgage application?

If you’re a self-employed construction worker, you’re paid through the CIS and you want to apply for a mortgage using your gross CIS, it doesn’t matter if it’s irregular. It’s quite normal to have an up and down income.

If you’re on a price work agreement, it may be feast and famine – you might have £2,000 one month and £8,000 the next. It just depends what invoices you put in that month. That’s not a problem for a lender.

How much can I borrow as a self-employed construction worker?

I’m going to give two examples here, because if a self-employed construction worker isn’t paid through the CIS scheme, the amount you can borrow is normally based on the average of your net profits, or the latest year, if it’s lower. Lenders use the net profits on your tax return, and you normally need two years’ worth.

The amount you can borrow is typically 4.5 to five times your income. That will also be impacted by how many children you have, what finance agreements you’ve got in the background and any other financial commitments. You might be paying child or spousal maintenance, school fees or childcare costs. That will affect it, but generally speaking it’s 4.5 to five times your net profit.

If you’re paid through the CIS scheme as a self-employed construction worker, the amount you can borrow is significantly more. That’s because it’s based on your gross average CIS income before tax and before expenses.

Again, the same 4.5 to five times income multiples apply, but the starting figure is much larger – we’re not factoring in any expenses that your accountant would use to reduce your tax bill.

What if my most recent year’s income is lower than the previous year’s?

If your most recent year’s income is lower than the year before and you’re not paid through CIS, then instead of taking an average of your last two years, lenders would rely on the latest year. They’ve got to look at it as a worst case scenario.

They can’t just assume that the income is going to go back up to where it was – it could be on a downward trend. Some mortgage lenders might ask your accountant for a projection of next year, especially if it’s already some way into that year. But that’s only relevant for self-employed construction workers that are not paid through CIS.

If you are paid through the CIS scheme, it doesn’t matter. Mortgage lenders won’t be looking at your self-assessment – they’re only looking at your payslips for the last few months.

Which mortgage lenders accept self-employed construction workers? Are there specialist lenders or brokers for self-employed mortgages?

Every single mortgage lender will accept self-employed construction workers. That’s not a problem.

They might put a cap on the age. Depending on whether you’re in a supervisory role or on the tools, they may have a view on whether you can take that mortgage up to age 68 or 70 and beyond.

I did a mortgage for a client up to age 75 last week. He was a site supervisor, and the mortgage lenders were happy that he could still do that job aged 75.

However, if you’re a self-employed construction worker paid through the CIS scheme, it limits your mortgage lenders. There are currently 15 to 20 lenders that cater for CIS construction workers. It really just depends on your payment structure.

The second part of the question is about specialist lenders or brokers. While there aren’t any specialist lenders for self-employed construction workers, there are specialist lenders for self-employed people generally. They might cater for those with more bespoke self-employed scenarios.

It might be that they aren’t CIS, and they’ve only been self-employed for one year. Or a specialist lender might take a projection of income from an accountant. They are few and far between, but it can be done.

In terms of brokers, there are mortgage brokers that often work with self-employed people. I personally work mainly with self-employed construction workers. That’s my thing. And of course, anybody can get in touch with us via the details on the website.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

Approved by The Openwork Partnership on 17/09/2025.