Mortgages for solicitors, law firm partners and LLP members

Many of our clients are partners in large law firms, and we also advise partners in accountancy practices, consultancies and other professional partnerships and LLPs. They tend to have strong, reliable incomes. Yet the way partnership income is paid, taxed and documented often confuses a standard mortgage assessment.

You may draw a set monthly amount, receive a balance once the year end accounts are finalised, set money aside for tax, and have capital tied up in the firm. None of that maps neatly onto a payslip. The right lender will understand it. The wrong one may assess you on a figure well below what you actually earn.

Mortgages for solicitors at every stage

How a lender looks at your income depends on where you are in your career, and the answer changes as you progress.

• Trainees and associates. Paid through payroll, so most lenders assess you on your payslips like any other employee. Some lenders offer enhanced terms for qualified solicitors, so it can pay to look beyond the standard high street criteria.
• Senior associates and salaried partners. Usually still assessed on payslips. Bonuses and any variable element are treated differently from lender to lender, often averaged or partly discounted.
• Equity partners. Now self employed for tax, and assessed on your share of the firm's profit. This is where lender choice matters most, as the sections below explain.
• Moving firms or making partner. A change of status or employer part way through a mortgage application needs careful timing. Talk to us before you sign or resign.

How lenders assess partnership income

Most lenders start with your share of the firm's profit rather than your drawings. Where they differ is in which years they use and what evidence they accept.

• Two year averaging. Many lenders average your profit share over the last two years. If your share has grown, perhaps through a move up the equity ladder, the average sits below your current position.
• Latest year. Some lenders will use your share of profit from the latest year on its own, where the trend supports it. For a partner whose points or share have increased, this can change how much may be available.
• A letter from the firm. Some lenders will accept a letter from a senior partner or the firm's accountants confirming your share of profit, instead of SA302s, tax year overviews and the partnership agreement. That can make the process quicker and more discreet.

We cover the cost of averaging in more depth in your best year yet, averaged away by the lender.

Situations we often see with partners

Newly promoted to equity partner

Promotion is often the moment partners want to move home, and it is also the moment your tax records look least like your new income. Some lenders will consider a newly promoted partner using confirmation of the expected profit share from the firm, particularly if you have been there for some years beforehand. Others want a full year's figures first.

Capital contributions and capital loans

Joining or moving up within a partnership often means contributing capital, sometimes funded by a bank loan arranged through the firm. Lenders will usually count those repayments as a commitment, so the loan needs to be presented clearly from the start.

Salaried and fixed share partners

A salaried partner paid through payroll is often assessed like an employee. A fixed share partner with a variable element sits somewhere in between, and lenders treat the variable part differently. We check how your firm describes your role before choosing a lender.

Tax reserves and payments on account

Many firms hold back part of your profit to cover tax. That is normal, and some lenders will look at your share of profit before the reserve. Questions about the tax itself are for your accountant or the firm's tax team.

All lending is subject to underwriting and valuation, and every case is assessed on its own facts.

What you'll usually need

• A letter from a senior partner or the firm's accountants confirming your share of profit
• SA302s and tax year overviews, if the lender asks for them
• Your partnership or LLP agreement, where it is needed
• Details of any capital contribution and any loan used to fund it
• Recent personal bank statements
• For a new or lateral partner, your offer or admission terms

How we work with partners

1. A proper conversation. 30 to 45 minutes by phone or video, at a time that works around your diary, covering how your firm pays you and what you want to do.
2. Your documents, once. Uploaded through our secure portal against a checklist built for partnership income.
3. Research the market. We compare how lenders would read your profit share and shortlist those that fit.
4. Decision in principle. So you can make offers with confidence, subject to underwriting and valuation.
5. Full application. We package the case for the underwriter, explaining your firm's structure and any recent changes up front.
6. Offer to completion. We keep things moving with the lender and your solicitor, and review your protection.

If you also hold a stake in a separate limited company, our page on mortgages for company directors explains how that income is assessed. The first consultation is free. When you are ready, get in touch and we will aim to reply within the hour during office hours.