Published 2 January 2017 · Last reviewed 1 May 2026
Understanding limited company buy to let mortgage products for First time landlords is going to be key in 2017.
This article is aimed at entrepreneurs who are looking to get into the buy to let market with the use of a Limited company buy to let mortgage. Niche Advice arranges limited company buy to let mortgages and is NOT a tax specialist so we recommend that you would need to speak professional help in this regard.
As a first time landlord you have no legacy preventing you from of holding your properties under a limited company, which can have the following advantages:
- Company profits will be taxed at corporation tax rates.
- Drawn income may be from directors’ remuneration (utilising the personal allowance) and dividends which are at a lower rate than income tax.
- Greater amount of property and interest charges may be able to be offset.
- Multiple limited companies can be used to cross-subsidise management expenses.
- Simplifies the addition and removal of share/title holders, and succession planning.
- The buy to let mortgage rental coverage calculations may be lower as recent PRA recommendations are aimed predominantly at protecting ‘individuals’ rather than companies.
Most Buy to Let Mortgage Lenders will usually look for the limited company to be a ‘special purpose vehicle’ (SPV) designed wholly for property with specific SIC code permissions. The setting up of a company is fairly straight forward and your tax specialist should be able to guide you further in this regard. For newly formed SPVs the Buy to Let Lender may request personal guarantees from the directors for their added protection, and underwrite on established earnings outside of the business.
Buy to let limited company mortgage is typically limited to 4 directors with 25% minimum deposit being the norm.