BTL Mortgages for
Limited Companies

Yes, there’s nothing stopping you from setting up a Limited Company today and purchasing a property through it tomorrow. As most lenders require a personal guarantee, they underwrite the applicants (the company’s directors and potentially its shareholders) behind the Limited Company as opposed to the company itself. Consequently, the mortgage is underwritten in the same way to an individual application. Read our blog on borrowing through newly set up Limited Companies here for more information. 

No. This must be treated as a sale and purchase transaction. The process is the same as if you were buying a new property, whereby your Limited Company will have to purchase the property at market value, and be subject to capital gains tax and the stamp duty surcharge. Whether this the right decision for you will wholly depend on your tax situation, so please seek professional tax advice before making any property investment decisions. 

An SPV (Special Purpose Vehicle) Limited Company is a Company set up for the sole purpose of buying and letting property – that’s it. Lenders typically prefer to lend to these types of Companies as they’re much easier to understand and, therefore, quicker to underwrite, as there’s less risk involved. You will typically need to provide an unsupported personal guarantee with your mortgage application, as lenders will be more concerned with the individuals who make up the Company to stress-test the income than the Company itself. 

A Trading Limited Company could be any other business you own. Whilst some lenders may offer to Trading Limited Companies, other view these as too high risk, as there is more that could impact your ability to repay your mortgage. There’s also more to review from an underwriting perspective, and these transactions are therefore more complex than with a standard SPV Limited Company application. There are plenty of benefits that come with investing in property via a Trading Limited Company, for example, you retain the profits in your business, but it’s best to speak to an expert tax advisor before making any property investment decisions. To read more about your options when investing via a Trading Limited Company, visit our blog here.