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Lenders to review self-employed mortgage delays on case-by-case basis

  • 18/05/2021
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Lenders to review self-employed mortgage delays on case-by-case basis
Lenders will take an individualised approach to self-employed borrowers whose applications have been delayed by HMRC, it has been said.


Last week, the tax department said there could be delays of more than a month to issue a tax year overview (TYO) for the self-employed if they had taken out a Self-Employment Income Support Scheme (SEISS) grant. 

This is opposed to the usual 24-72 hour turnaround to receive the TYO. The department put this down to incorrect returns being filed by taxpayers.

Nationwide said while it sympathised with borrowers facing hold ups receiving their documentation, it added: “this is an essential document that we require as part of the application process and mortgage offers are not issued until all of our requirements are met.” 

The building society said the presence of a Covid-related loan or grant would not be a reason to decline an application but said if a borrower was reliant on such income it would need to consider their long-term affordability in addition to the TYO.

Nationwide’s spokesperson continued: “In some cases, to support a lending decision we may request additional information such as accounts and business bank statements.”

Virgin Money said it was accepting self-employed borrowers who had taken an SEISS grant and said the majority were using previous year’s accounts for affordability. 

Although it had seen a few borrowers insist on using their 2020/21 accounts, there were no issues as they had always had their TYO to hand, it said. 

A spokesperson for Virgin Money added: “If there was an issue with a self-employed application, we’d work with the customer to understand what alternative income proofs were available and how we could help.” 

HSBC appeared to be taking a similar approach, as it said: “We will review each case that is affected by this issue individually.” 

NatWest said because it was not currently lending to those who had applied for a grant after 14 July, it was not seeing any hindrances with documentation. 

However, a spokesperson for the bank said: “As a responsible lender this is part of the bank’s affordability criteria, however we are currently reviewing our policies for self-employed customers who have applied for a SEISS grant and looking to update our policies and affordability calculators in the near future to better support these customers.  

“We do continue to consider other forms of income to support an application for self-employed customers, i.e. rental, employed income or other businesses.” 

Barclays confirmed it was accepting mortgage applications for those who had taken a SEISS grant but did not respond to queries over how it would handle any related delays, should they occur. 

Santander reaffirmed it would discount self-employed figures from 2020/21 and consider accounts from 2018/19 and 2019/20 instead in cases where borrowers had suffered a drop in income or received a grant under the SEISS. 

It did not say what it would do if borrowers chose to use figures from 2020/21. 

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