Limited company buy to let mortgages

Yes, buy to let mortgages are available for limited companies, registered in the United Kingdom.

Buy to let mortgages are generally available to limited companies that are set up solely for the purchase of property and related business, such as management and disposal. These are known as Special Purpose Vehicles (SPV).

The majority of buy to let lenders will require your limited company to be an SPV. However, we work with some lenders who will accept applications from trading companies.

SPV stands for Special Purpose Vehicle and is a limited company set up for a specific purpose.

If you invest in buy to let through a limited company, the company is commonly set up through what is called an SPV. Limited companies are registered with Companies House.

There are hundreds of categories that describe what sort of business a company is involved in. They each have a “Standard Industrial Classification” (SIC) code.

Codes relating to the purchase of property and related business, such as management and disposal property, are largely found in Section L on the Companies House website page.

Limited company buy to let mortgages no longer have significantly higher interest rates than investing in personal name, in fact mortgage interest rates for each are currently very similar. You can review today’s rates using our limited company buy to let mortgage calculator.

The main difference between investing in buy to let property via a limited company or as an individual is related to tax. You also have access to different Ltd co. buy to let mortgage products, depending on which route you choose.

Limited company or SPV buy to let mortgages (SPV means special purpose vehicle and describes a company set up for a specific purpose) are an attractive option for some property investors due to the tax efficiencies it can offer some people (typically higher rate tax payers). Corporation tax applies to limited companies rather than personal income tax. Corporation tax rates are between 19% - 25%. Personal income tax rates are 20% for basic rate taxpayers, 40% for higher rate taxpayers and 45% for additional rate taxpayers. Whether you buy in personal name or in company name, there are other considerations too, including Capital Gains Tax which would apply if you were to sell any property.

Please seek independent advice from a tax professional to determine which investment route suits your circumstances.

Landlords who are looking to purchase a buy to let property may find that doing so via a limited company may be more cost-effective due to tax relief.

Over time the government made changes to tax rules relating to buy to let. Landlords, purchasing through a limited company, are subject to different tax reliefs, than if they purchased it in personal name. This can reduce the tax bill paid by some investors.

Please note Commercial Trust does not offer tax advice, please speak to a qualified tax professional.

As a specialist mortgage broker, Commercial Trust is able to help you get a buy to let mortgage via a limited company for property within the UK.

We’re experts in all types of limited company mortgages and we work with a large panel of over 80 specialist and high-street UK lenders. Our mortgage advisors will be able to help you find a great deal for your circumstances and have access to some of the best rates on offer.

You can either approach lenders yourself to see which offers you the best deal, or use the skills of a specialist mortgage broker like Commercial Trust.

A broker will search all the lenders offering limited company BTL mortgages to find a product that 1) meets your needs and circumstances, and 2) offers you the most cost effective outcome. This service can save you time and, by getting you the most appropriate deal, could save you money.

To submit an application you will need a deposit of at least 15% for SPV mortgages (limited companies set up for a specific purpose, in this case property investment) or 25% for a trading limited company (buying through a business that is already operating in another field). You will need to supply proof of that deposit to the lender.

You will also need to provide company accounts, or bank statements, (if your company has only just been set up this won’t be applicable) and personal guarantees (the directors of the company will be ultimately responsible for mortgage payments being met if the company itself fails to do so).

The criteria for limited company buy to let mortgages will vary depending on which lender you choose. Some have stricter criteria than others.

Some example criteria include:

- Minimum deposit 15-20% of the value of the property

- The company must have been created at the point of application (brand new companies are accepted from day one of incorporation)

- Personal guarantees are required from company directors, which would come into effect if mortgage payments are not met

Mortgages for limited company buy to lets are different those for individuals. This is because there are different risks associated with each type of borrowing. The interest rates themselves are fairly similar, but not all lenders accept applications from companies.

To get an illustrative idea of the mortgage deals available to you, use our limited company buy to let mortgage calculator. This will show you the current rates we have available from our lenders.