Effects of Covid/SEISS on self employed mortgage offers

[Doughnut100]

7 years ago I got a mortgage through London & Country as a self-employed person with no issues. Now I'm trying to buy a house with my partner, I'm employed and he's self employed. We submitted the mortgage application 2 months ago and the lender (Halifax) have just said the mortgage is unaffordable for him as he's currently in receipt of SEISS and the business is dormant due to Covid. The frustrating thing is that he in the last 5 months he's started a new business while the original one is dormant, and is earning plenty. But they can't take this into account as he doesn't have 2 years of books for it. Now if we have to go back to the market and try to find another lender we will likely miss out on the property. We have a baby due at the end of April. Argh. Any recent experiences or tips?

Find a good broker.

Proof of income for three years is impossible though isn’t it with a new business? He’s not even completed a year. I cannot see how a broker will get round this. DD recently got a mortgage and she’s self employed and work coming in is very strong. She needed 3 years, not 2, with Lloyds. Lots of lenders will see this as a risk.

Sorry not to be clear. He had three years of accounts for the dormant business, that's what we made the application on the basis of, and they are strong numbers. But due to covid restrictions he can't currently trade so is in receipt of SEISS (self employed equivalent of furlough) for that business. Our broker made the application in the knowledge that he is currently in this situation. The new business is just an added bonus to show that actually he is not just living off SEISS, he has proactively gone out and found other work while waiting for covid restrictions to lift.

I thought L&C were a good broker - I've used them twice in the past. Our broker says that Halifax have only started behaving like this very recently in light of the current situation. But maybe we need to try a different broker.

My DH is self employed - L&C never phoned us back as obviously saw us as too much hassle. There are brokers who specialise in self employment.

I have been claiming the SEISS grant and our mortgage broker said it would be easier to not put me on the mortgage application because lenders are seeing it as a real red flag at the moment and there are lots of hoops to jump through to get lenders to see your income as reliable. Thankfully, my earnings only make up about 10% of our income, so it only affected what we could borrow by 30k or so. This was an HSBC mortgage, I don’t know whether other lenders are viewing the SEISS similarly, but I think they probably are.

Just thought I would post my conclusion in case anyone is searching for into on this forum.

We were approved for our mortgage today as it happens!

My partner had 2 solid years of accounts, SEISS for the covid period, and three months of bank statements for his post-covid business.

Our broker at L&C explained that they needed to prove the following to Halifax:
Stability and long term nature of business - proven by accounts submitted.
Affordability i.e. income - this crucially didn't need to be from the original business, so actually bank statements from the new business were sufficient.
Likelihood of returning to profitability - I think the new business was also allowed to influence this point.

Thank you for all your responses.

Congratulations! Great to hear a positive outcome

Brilliant, that sounds great!

Thank you! We are thrilled, I was definitely expecting the worst there!