He applied to the Leeds Permanent office in Bridgwater, Somerset, for a pounds 28,000 mortgage. He provided three years' accounts, which showed that the business was improving and total profit for the previous year was pounds 19,000.
As he took a higher percentage of profit than his mother - she took pounds 6,000 and he pounds 13,000 - he assumed that, working on the usual criterion of three times profit, he would have no trouble in raising the money.
So he was perplexed when he was only offered pounds 26,000, the reason being that the Leeds work on three times profit or drawings from the business in the year in question, whichever is the lowest. As the farmer lived quite frugally, his drawings, at pounds 8,752, were much lower than his share of profit.
Ian Darby, marketing director at the mortgage broker John Charcol, said: 'Lenders have become much much tougher on the self-employed. Three years' accounts are needed and the financial strength of the company is taken into consideration. But, in general, three times profits if the company is doing well should be acceptable.'
He said lenders might also be restricted by rules imposed by insurers providing mortgage indemnity cover.
The reader in question has since gone on to obtain a mortgage from Abbey National.
A spokesman for the Leeds said: 'We look for three years' of audited accounts and have been getting more particular in who we lend to. And yes, calculations worked on drawings are becoming more frequent.'
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