Limited Company Buy-to-Let Mortgage Guide (UK)
Looking to build a property portfolio or save on tax? Buying through a limited company could be a smart move. Here's how the process works, what to consider, and why more landlords are choosing this route.
What Is a Limited Company Buy-to-Let Mortgage?
A Limited Company Buy-to-Let Mortgage is a loan taken out by a limited company, rather than by an individual, for the purpose of buying a property to rent out.
In most cases, the company will be a Special Purpose Vehicle (SPV) — a company set up solely to hold property and manage lettings, usually registered under SIC code 68209 (“Other letting and operating of own or leased real estate”).
Why Buy Through a Limited Company?
Key benefits:
- Mortgage interest is fully tax-deductible (unlike individual ownership)
- Corporation Tax (19–25%) is often lower than higher-rate Income Tax
- Potential for retaining profits within the company to reinvest
- May be more tax-efficient for larger portfolios
Things to consider:
- Higher mortgage rates and fees than personal BTL
- Limited lender choice
- Additional administrative and accounting costs
- Possible Capital Gains Tax if transferring existing properties
Limited Company BTL: Step-by-Step Process
1. Set Up a Limited Company
- Register a new SPV with Companies House (or use an existing one with the correct SIC code)
- Appoint directors and shareholders
- Open a business bank account
- Ensure your company is structured correctly — take tax advice if unsure
2. Speak to a Mortgage Broker
- Limited company BTLs are a niche area — a specialist broker can help you:
- Understand lender criteria
- Access the best deals
- Avoid common pitfalls
3. Get a Decision in Principle (DIP)
- This gives you an estimate of how much you can borrow, based on:
- Expected rental income
- Company details
- Your own financial profile as the director/shareholder (most lenders still assess you personally too)
4. Find a Property
- Look for properties with strong rental yields
- Many lenders require rent to cover 125–145% of the mortgage repayments at a stressed interest rate
- Consider location, demand, and long-term value
5. Submit Your Mortgage Application
- You’ll need to provide:
- Company registration details and SIC code
- Business bank statements (if applicable)
- Personal ID and income details
- Projected rental income
- Details of the property
- Accountant’s certificate (sometimes required)
6. Valuation and Underwriting
- The lender will carry out a property valuation
- They’ll also assess:
- Rental income suitability
- Your experience as a landlord (if any)
- The structure and financial strength of your limited company
7. Receive a Mortgage Offer
- Once approved, you’ll receive a formal mortgage offer
- Offers are usually valid for 3–6 months
8. Legal Work (Conveyancing)
- Use a solicitor familiar with corporate property transactions
- They’ll check the legal structure, review the offer, and liaise with the lender
9. Completion
- The mortgage funds are released, and your company becomes the legal owner of the property
After Purchase: Operating as a Company Landlord
- Register with HMRC for Corporation Tax
- Maintain proper company accounts
- Meet all landlord legal responsibilities:
- Gas/electric safety checks
- Deposit protection
- Right to Rent checks
- EPC of E or above
You may also want to:
- Use a letting agent
- Keep financial records for mortgage renewals or refinancing
Tax and Legal Advice Is Essential
Using a limited company can be more tax-efficient, but it’s not right for everyone. Always consult with:
- A specialist accountant
- A tax adviser
- A mortgage broker experienced in limited company lending
Final Thoughts
Buying property through a limited company is increasingly popular with landlords focused on long-term investment and portfolio building. It comes with more paperwork — but also potential for greater returns.
Thinking about setting up a limited company for your next buy-to-let? Get expert advice from our mortgage specialists - we’ll guide you every step of the way.
