Can a Limited Company get a buy to let mortgage?
Lenders are willing to provide buy to let mortgages to Limited Companies. However, they do not like lending to trading businesses and prefer SPV’s so that assets are liabilites are easier to see and control.
If the Company receives income from normal business activities, not solely property letting, then they are unlikely to lend as this is a trading company, not a SPV.
What is a SPV Limited Company?
A SPV (Special Purpose Vehicle) is very simply a Limited Company that has been set up for the sole purpose of investing in and letting residential property. When the Company is being set up at Companies House you will need to use the correct SIC code and this determines the Company’s principal business activities.
It can take only a day or two to set up a new SPV. This can be done online via a DIY website or you could ask your accountant to set it up. Whichever option you choose, remember that setting up a bank account for this new entity can take many weeks, so allow enough time for this to be completed.
Should I set up a SPV?
Using a SPV for buy to let investing and property portfolios is now very common and the lenders are more comfortable with the purpose and structures. However, you need to seek tax advice based on your own circumstances before setting up a SPV. They cost money to set up and run and won’t work for everyone. So speak with your tax adviser for further guidance.