Limited Company Buy to Let Mortgages

A Limited Company Buy to Let Mortgage is a financing arrangement where rental properties are owned and managed through a limited company rather than as an individual landlord. The limited company acts as the legal entity responsible for the properties.

Limited companies can benefit from more favourable tax treatment, including potentially lower rates of taxation on rental income and capital gains. Interest on mortgage payments may also be fully deductible, which can result in significant tax savings compared to individual ownership.

While there are many advantages, there are also considerations such as administrative overheads, setup costs, and potentially, slightly higher mortgage rates. Additionally, limited companies involve additional compliance requirements and reporting.

Lenders assess the directors and/or shareholders in the same way as a BTL being purchased by an individual as the lender is still lending to the directors and/or shareholders, not the company.

Setting up a limited company involves registering it with Companies House, appointing directors and completing the necessary legal paperwork. It’s advisable to consult with an accountant and mortgage adviser for guidance on structuring the company.

The company should be a Sole Purpose Vehicle (SPV) solely for the use of renting or selling property.
The Standard Industry Classification (SIC) code should be as follows: ‐

68209 Other letting and operating of own or leased real estate – this is typically used for property rentals

68100 Buying and selling of own real estate – this is typically used for
trading (buying and selling)

Many lenders require this SIC code to be showing on Companies House records at the time of the application.

Lenders are happy to lend to new companies; you do not need to have existing company accounts.