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.

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What Is a Limited Company Buy-to-Let Mortgage?

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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”).

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Why Buy Through a Limited Company?

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Key benefits:

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• 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

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Things to consider:

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• Higher mortgage rates and fees than personal BTL
• Limited lender choice
• Additional administrative and accounting costs
• Possible Capital Gains Tax if transferring existing properties

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Limited Company BTL: Step-by-Step Process

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1. Set Up a Limited Company

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• 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

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2. Speak to a Mortgage Broker

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• Limited company BTLs are a niche area — a specialist broker can help you:
  
  • Understand lender criteria
  • Access the best deals
  • Avoid common pitfalls

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3. Get a Decision in Principle (DIP)

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• 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)

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4. Find a Property

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• 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

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5. Submit Your Mortgage Application

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• 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)

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6. Valuation and Underwriting

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• 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

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7. Receive a Mortgage Offer

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• Once approved, you’ll receive a formal mortgage offer
• Offers are usually valid for 3–6 months

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8. Legal Work (Conveyancing)

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• Use a solicitor familiar with corporate property transactions
• They’ll check the legal structure, review the offer, and liaise with the lender

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9. Completion

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• The mortgage funds are released, and your company becomes the legal owner of the property

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After Purchase: Operating as a Company Landlord

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• 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

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Tax and Legal Advice Is Essential

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Using a limited company can be more tax-efficient, but it’s not right for everyone. Always consult with:

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• A specialist accountant
• A tax adviser
• A mortgage broker experienced in limited company lending

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Final Thoughts

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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.

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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.