SPV vs trading Ltd - which one for BTL
Most BTL lenders prefer Special Purpose Vehicles - limited companies set up specifically to hold property, with SIC codes 68100, 68209, or 68320.
- SPV pros: wider lender pool (20+ specialist lenders), better rates, faster underwriting.
- Trading Ltd pros: simpler if you already have a Ltd doing other business and want to add property.
- Trading Ltd cons: smaller lender pool (5-10 specialist lenders), often slightly higher rates, more complex underwriting.
For a single property, the cost of incorporating an SPV (~£12 + £80-£150 to set up properly) is dwarfed by the rate savings over the life of the mortgage. A specialist accountant typically recommends SPV for BTL.
Typical Ltd BTL mortgage terms
| Element | Typical range |
|---|---|
| Deposit | 25-40% (75-60% LTV) |
| Rate (5-yr fixed) | 5.5-6.5% (2025/26) |
| Arrangement fee | 1-2% of loan |
| Stress rate (rental cover) | 5.5-7.5% notional |
| Rental cover ratio | 125-145% of stress rate |
| Personal guarantee | Almost always required |
What you'll need to apply
- SPV or trading Ltd company set up with relevant SIC code
- 2-3 months of company bank statements (or none, if newly incorporated)
- Director SA302s and tax overview if relying on personal income
- Property details and BTL valuation
- Deposit funds in the company (or evidenced loan from director with documented terms)
- Letting agent agreement or rental projection
Frequently asked questions
How quickly can a Ltd BTL mortgage complete?+
Decision-in-principle usually within 1-2 weeks. Full offer 4-6 weeks after that. Completion 2-4 weeks after offer (subject to conveyancing). So 6-12 weeks end-to-end is typical.
Do I need a personal guarantee?+
Yes - almost always. Lenders want recourse to the directors personally because the company has no other assets. Specialist brokers know which lenders limit the guarantee scope (e.g. capped at the loan amount).
Can two directors apply jointly?+
Yes - very common. Both directors usually personally guarantee. Some lenders allow joint guarantees with each director liable for half; others require joint and several (each liable for the full).
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