The property will be bought via a Special Purpose Vehicle (SPV), which is a company structure set up for a given purpose, with its own assets and liabilities and its own legal status. In the world of property investment, landlords often use an SPV to purchase buy to let, holiday let or commercial premises. 

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There are some lenders who can accept existing, trading LTD Co to buy the property through, but it is very limiting.

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Some people ​will put a BTL they already own in a personal name to an SPV. This can be done but will need to be classed as a sale, meaning that Stamp Duty is liable. Not all lenders require a "cash" deposit to be put down, and the difference between the new mortgage and purchase price can be used as "virtual equity". You can usually take money out of the  property to cover purchase costs when doing so. 

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Typical, criteria for LTD Co BTLs (will vary from lender to lender)

• Only SPVs  with one or more of the following Standard Industrial Classification (SIC) codes are considered- 68100, 68201, 68209, 68320

• Partnerships or LLPs aren’t accepted.

• Companies must be registered in England, Wales or Scotland. SPVs are considered from day one of being set up.

• A floating charge over assets of the company isn't required.

• SPVs that have associated commercial property/assets are not accepted.

• Personal guarantees are required from all directors in all cases.

• Applications where a property is owned by the director(s) and is being purchased by their Limited Company will be considered. Please note such applications must be submitted as a purchase.

• Please be aware that all guarantors will need to obtain Independent Legal Advice prior to completion.

 

Company structure

• Companies must be an SPV; company structures outside of this aren’t acceptable.

• The usual maximum number of directors/shareholders is four and they must be the same people. 

• Directors/Shareholders must match records at Companies House.

• All shareholders must be directors and own 100% shareholding in the limited company between them.

• Make sure to input the Company/Person with Significant Control (PSC) Director details correctly.

 

Source of deposit

• Cannot Business Bounce Back Loan and other coronavirus related support as deposit.

• Loans from another company won’t be accepted, however a repayment of a director’s loan or dividend payment from another limited company will be considered.

• A gifted deposit from individuals to director(s) are acceptable, however gifts to the company are not.

• Non-UK gifts and funds from non-UK companies or trusts are not accepted. If directors of the SPV have funds overseas, these can be considered subject to a satisfactory audit trail.

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Your property may be repossessed if you do not keep up repayments on your mortgage.Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority