The situation
Our clients had previously owned property but were renting after selling their last home. When their landlord decided to sell, they were presented with the opportunity to purchase the property they were already living in.
They were looking to secure a mortgage at under 50% loan-to-value (LTV) on an interest-only basis, with a five-year fixed rate, while maintaining financial flexibility across their wider business interests.
The challenge
Although the clients were financially established, their income didn’t fit neatly into a standard affordability model.
They part-own a property development business and had reinvested a significant amount of capital back into the company. On advice from their accountant, they had been repaying themselves via a director’s loan, rather than taking a traditional salary or dividends.
As a result:
• Their personal income appeared low on standard documents such as tax calculations and tax year overviews
• The company’s profitability fluctuated significantly, reflecting typical development cycles
• A previous mortgage application with another lender had already been declined
While the clients’ overall financial position was strong, many lenders were unwilling to look beyond headline personal income alone.
Our approach
Following a personal referral, the clients approached Alexander Hall for support after a previous application elsewhere had been unsuccessful.
Rather than relying solely on personal income, the application was assessed using a broader view of affordability, with the company accounts reviewed to better reflect the clients’ underlying financial position. Operating profit and the sustainability of drawing income from the business were examined, with appropriate context given to the natural fluctuations seen during build and sale phases within property development.
Although the most recent set of accounts had not yet been finalised, the lender was provided with detailed, accountant-supported projections for the current financial year, allowing previous income volatility to be clearly explained and a forward-looking assessment to be considered. Based on this information, the case was reviewed by a specialist lender using a bespoke underwriting approach that took into account business performance alongside personal income, supported by clear and robust evidence.
The outcome
Following a detailed assessment, the lender was able to approve the application at sub 50% LTV, meeting the clients’ requirement for an interest-only mortgage with a five-year fixed rate.
Despite the earlier decline elsewhere, the tailored approach resulted in a solution that:
• Reflected the realities of the clients’ business structure
• Offered a more competitive rate than initially expected
•
Allowed the clients to proceed with their home purchase without disrupting their wider financial strategy
Why it matters
This case highlights the importance of tailored mortgage advice for business owners with complex income. Where applications fall outside standard criteria, specialist underwriting and the right supporting evidence can make a meaningful difference to the outcome.
Speak to an adviser
To talk to one of our advisers about your mortgage needs, call us on 08000 38 37 36 or book an appointment today.
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