It's hard to move home if you're self-employed'

Published by on 05 September 2016.
Last updated on 05 September 2016

Tim and his family

My wife Caroline and I purchased our first home – a Victorian mid-terrace in Southampton, Hampshire – for £107,000 14 years ago. It was ideal for a couple with no commitments, but we now have three children, so we decided it was time to move on.

After one buyer pulled out, we eventually found a first-time buyer who bought our home for £223,500.

We have since moved into a four-bedroom 1960s bungalow on the outskirts of the city after our offer of £333,000 was accepted.

However it has not been an easy ride and at every step of the way there were obstacles, even down to the credit check.


Despite our exceptionally good credit history, we did not achieve 100%. As even though we fully pay off our credit cards at the end of every month, the timing of the check recorded outstanding balances.

Being self-employed was also an issue. We run, which represents selected professional artists and craftspeople. But for a new mortgage it was necessary to have up-to-date accounts and self-assessment tax returns. We had to collate three years’ evidence of earnings, maternity allowance, child tax credits, and child benefit – all of which takes time to prepare.

And when it came to transferring over our existing mortgage – a variable rate deal with £53,000 remaining on a rate of 1.4% above base rate – we were told by our bank over the phone that we couldn’t increase our borrowing because we did not earn enough.

Undeterred, we booked an appointment in our local branch. Our current mortgage was an old product and the bank could not transfer it to our new property. However, it did match the rate with a new loan, adding a second lifetime mortgage for £54,000 at 2.39% above base rate.

Our mortgage adviser then had to pass the loan to underwriting – a standard procedure for the self-employed – before it was finally approved a week later.

Our monthly mortgage costs stand at about £425 and there is a manageable 26-year term with an overpayment option at no additional cost.

With our £76,000 savings, the profit from our house sale, and the new mortgage, we were able to afford to buy our new home.

Saving money throughout the home-buying process has been important. We were tempted to choose an online conveyancing service to do the legal work, but contact is only by email or phone rather than in person. Instead, we went for a solicitor who quoted £1,432 for both the sale and purchase – compared to other firms, this was up to £1,500 cheaper.


We also successfully negotiated a £4,500 reduction on our home, bringing the asking price down to £328,500. This was after our homebuyer survey – carried out by a chartered surveyor (who was not VAT registered) for £360 – highlighted issues with the driveway, damp and safety hazards. And we haggled down the estate agent’s sales commission on our old home to 1% of the sale price.

After devoting a great many hours on this project, it is Caroline’s dogged persistence that has got us into our new home. We have compromised on its character, but it satisfies all our other criteria; it is detached with a large garden, it’s in a quiet location, and it’s close to good schools.