Specialist advice for limited company property investors
Clear guidance on SPVs, rental stress tests, personal guarantees and lender expectations — helping you decide whether buying through a limited company is the right move.
Is a Limited Company right for your buy-to-let?
Buying property through a limited company can be powerful — but it isn’t right for everyone. Answer the questions below to see whether it’s likely to suit your situation.
Are you planning to hold the property long-term rather than flip it quickly?
Will rental income be retained or reinvested rather than taken personally?
Are you comfortable providing a personal guarantee
What this means:
A personal guarantee is a legal promise you give as a director.
If the limited company can’t repay the mortgage and the property sale
doesn’t fully cover the debt, the lender can pursue you personally
for the shortfall.
Most UK limited company buy-to-let lenders require this.
if required by the lender?
Do you already own (or plan to own) more than one investment property?
Personal Guarantee
What this means: A personal guarantee is a legal promise you give as a director.
If the limited company can’t repay the mortgage and the property sale doesn’t fully cover the debt, the lender can pursue you personally for the shortfall.
Limited company buy-to-let — what it’s for (and what it isn’t)
Buying property through a limited company is one way to structure a buy-to-let investment. It can work very well in the right circumstances — but it isn’t automatically better than buying in your personal name.
What the limited company route is for
- Holding buy-to-let property as a long-term investment.
- Reinvesting rental profits rather than drawing them personally.
- Building or planning a property portfolio.
- Separating personal finances from investment activity.
- More structured planning with an accountant and adviser.
What it’s not for
- A guaranteed tax saving — outcomes vary by individual.
- A simpler or quicker alternative to personal buy-to-let.
- A way to avoid lender scrutiny or personal responsibility.
- Short-term or “one-off” property plans.
- Situations where flexibility and minimal paperwork are the priority.
Who it often suits
- Existing landlords expanding beyond one property.
- Higher-rate taxpayers planning to reinvest income.
- Investors comfortable with company accounts and reporting.
- Those happy to provide personal guarantees where required.
Who may be better buying personally
- First-time landlords with a single planned property.
- Buy-to-let investors needing maximum borrowing flexibility.
- Those planning to sell in the short to medium term.
- Anyone wanting the simplest possible setup.
If you’re somewhere in the middle, that’s completely normal. The right structure usually comes down to balancing tax, lending criteria and long-term plans.
SPV vs trading company — what’s the difference?
When buying buy-to-let property through a limited company, In most cases, lenders prefer an SPV — even if you already have a trading company. Using the wrong structure can significantly reduce your mortgage options.
SPV (Special Purpose Vehicle)
An SPV is a limited company set up solely to hold property. It usually has no trading history and exists only for buy-to-let investment.
- Purpose-built for property investment
- No other trading activity
- Typically uses property-specific SIC codes
- Most widely accepted structure by BTL lenders
Why lenders like SPVs: they’re simple, transparent and easy to assess.
Trading company
A trading company is an existing limited company that already operates a business (for example consultancy, retail, or services) and is also buying property.
- Has existing trading income
- May have multiple business activities
- Often assessed more cautiously by lenders
- Fewer lender options compared to SPVs
Why lenders are cautious: mixed activities increase complexity and risk.
Rental stress tests & affordability
Limited company buy-to-let mortgages are not assessed in the same way as residential borrowing. Instead of looking at your personal income, lenders focus primarily on whether the rental income comfortably covers the mortgage.
What is a rental stress test?
A rental stress test checks whether the expected monthly rent is high enough to cover the mortgage payment at a higher “stress” interest rate.
This is designed to ensure the mortgage remains affordable if interest rates rise.
Why it matters for limited companies
For limited company buy-to-let, lenders usually apply higher stress rates and specific coverage ratios.
Your personal salary or dividends are typically not used to support affordability.
Deposits, LTVs & leverage — what to expect
For limited company buy-to-let, the size of your deposit plays a bigger role than it does for most residential mortgages. When rental coverage is tight, adjusting the deposit is often the key lever lenders use.
Typical loan-to-value ranges
- 75% LTV is the most common starting point.
- Some lenders may cap at 70% depending on property type.
- Lower LTVs can improve stress test outcomes and lender choice.
Why deposits matter more in a limited company
- Rental stress tests are applied at higher assumed rates.
- Reducing the loan lowers the stressed monthly payment.
- Even small deposit changes can shift a deal from “no” to “yes”.
When higher deposits are often needed
- The rent is borderline against lender stress tests.
- The property is a flat above commercial premises.
- It’s a new build or non-standard construction.
- You’re using a trading company rather than an SPV.
A realistic trade-off
- Higher deposits often mean smoother approvals.
- Lower leverage can reduce long-term risk.
- The “best” structure balances growth and resilience.
If your numbers don’t work at first glance, it doesn’t necessarily mean the deal fails — it usually means the structure needs adjusting.
Common limited company buy-to-let mistakes
Most problems we see aren’t caused by bad properties — they’re caused by timing, structure or assumptions that don’t align with lender criteria.
Many buyers use an existing trading company when an SPV would give them far more lender options. Once an offer is accepted, changing structure can cause delays or derail the purchase.
Lender criteria can affect achievable loan size, deposit levels and even property suitability. Getting clarity before offering helps avoid renegotiations or lost fees later.
Unlike residential borrowing, most limited company buy-to-let lenders focus on rental income. High personal earnings don’t usually offset weak rental coverage.
Many investors assume limited liability removes personal risk. In reality, personal guarantees are common and should be factored into decision-making early.
Limited company purchases involve additional checks and documentation. Using a solicitor without this experience can lead to delays or lender-related issues late in the process.
Limited company buy-to-let FAQs
These are some of the most common questions we’re asked when clients are considering buy-to-let through a limited company.
No. A limited company can work very well for long-term or portfolio investors, but it isn’t automatically the best option. Tax position, lending criteria, future plans and complexity all need to be weighed up.
Not usually. In many cases it’s better to confirm the right structure first, as setting up or using the wrong company can limit lender options later.
For most limited company buy-to-let mortgages, affordability is based on rental income rather than personal salary or dividends. Your personal profile still matters, but it usually won’t prop up weak rental coverage.
They’re very common, particularly at higher loan-to-values. Some options exist with reduced guarantees, but these usually involve lower borrowing levels or more restrictive criteria.
A short, no-pressure conversation is usually the quickest way to sense-check structure, affordability and lender appetite before committing time or money.
Ready to sense-check your plans?
Whether you’re actively buying or just exploring your options, we’re happy to talk things through.
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