Usually, when people invest in the buy-to-let market, they will buy it in their own name and obtain a mortgage in their own name, as an individual. However, the buy-to-let market has started to change in recent years, due to how landlords are taxed.

This has meant that rather than own the property in your own name, you can in fact purchase it through a limited company which is also known as a Special Vehicle Purchase (SPV). This route offers the possibilities of lower taxation benefits. An SPV is simply a limited company which is set up just to hold property, literally nothing else.

Here at Teesside Money, our advisors are well equipped to be able to help and provide the advice that you need as we have been arranging and advising on Limited Company mortgages since they were launched, so you can rest-assured that you are in safe hands.

However, we are not tax experts so would also recommend that you seek independent advice from a qualified accountant. Because of the nature of our industry, we work closely with lots of local, reputable accountants, so if you so wish, we can help with an introduction.

How do I set up an SPV Limited Company?

It’s a relatively straight-forward process. Lenders will require you to register your new company in the UK on Companies House. As part of the process you will need to select your SIC cod from the list provided. The SIC code is used to identify/classify the nature of your business. If you need additional assistance, just ask. At Teesside Money we have access to business partners who can offer guidance.

What deal would I get for a Limited Company Buy-to-let Mortgage?

In an ideal world, if you’re looking for an SPV mortgage, then you need to deal with a specialist SPV broker. Teesside Money are directly authorised by the Financial Conduct Aithority. This gives us access to any lender in the UK that will deal with an introducer.

Rates wise, which let’s face it, is the important part, can be very varied in this particular market place. The cheapest buy-to-let rates are not always available to limited companies. But, there are specialist lenders out there, who will offer specific rates to SPV mortgage borrowers, as long as you know who to go to. Which we do.

How much deposit would I need for my SPV mortgage?

As with all mortgages, loan to value ratios can differ enormously and with the buy-to-let market, the maximum for most lenders is 75% meaning you would need a 25% deposit. Ther are some lenders that offer an 80% deal but you will tend to pay a higher inteerest rate for this deal.  All dependent on the lender’s criteria of course and their appetite for lending.

As with a more commercial mortgage, elements such as bad credit come in to play, so if you have bad credit, then it’s likely you’ll need a larger deposit. The same can be said if you’re a first time buyer and already have 3 or more properties in your portfolio.

As with all mortgages, the best thing to do it so get in touch. At Teesside Money, we’re happy to talk through your options and find out what’s available to you.

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