How will swapping from Ltd Co to sole trader affect mortgage chances?

ellenmaryo

Hi there


My partner and I are both self employed - me as sole trader (3 years trading) and him as a ltd co. (5 years trading). His business has changed over the last two years and his accountant has advised that he make the ltd co dormant and become a sole trader.



Our combined average income over the last two years is £100k pa and set to be consistent with this for 2018-19 and the year ahead (2019-20).


How might becoming sole trader affect any potential mortgage application? Do lenders prefer ltd co accounts? Will a lender essentially start from scratch and view my partner's business as brand new and want to see two years account from now if he switches? Or are there some that will accept his SA 032 and take into account numbers from both businesses?


thanks
Ellen

ACG

Some lenders may want to see one years trading as a sole trader.
If you can hold off it will make your application easier and give you more options, but if the change is purely for tax purposes it should not be a deal breaker.