What is an SPV?
A Special Purpose Vehicle (SPV) is a UK limited company set up specifically to hold buy-to-let property. It's a normal Ltd company in every legal sense — registered at Companies House, with directors, shareholders, annual accounts, and corporation tax — but its SIC code is restricted to one of the property-investment classifications (typically SIC 68209, "Other letting and operating of own or leased real estate", or SIC 68100, "Buying and selling of own real estate").
Lenders care about the SIC code because they want to know the company exists only to hold rental property. A trading company that also holds property is much harder to underwrite — most BTL lenders won't lend to it at all. If you're considering using an existing Ltd company you already trade through, the standard advice is to set up a new, clean SPV instead.
An SPV typically has:
- One or two directors (often you, optionally your spouse)
- The same individuals as shareholders
- An SPV-specific SIC code (68209 or 68100)
- A registered office (your home, your accountant's office, or a virtual office)
- A business bank account
Setup cost is low — incorporation at Companies House is £50 online — but you'll want an accountant who works with Ltd landlords to set up the SIC code, share structure, and chart of accounts correctly. GoLandlord matches landlords with specialist accountants for this if you don't have one.
Why SPV mortgages exist — and the Section 24 driver
UK landlords held property in personal names for decades. That changed when HMRC introduced Section 24 of the Finance Act 2015 (fully in force from April 2020), which restricted finance-cost relief on personal-name BTL mortgages to a flat 20% basic-rate tax credit, regardless of your actual income tax band.
For higher-rate (40%) and additional-rate (45%) taxpayers, that was a material tax hit. The maths flipped: holding property inside a Ltd company — where mortgage interest is a deductible business expense against corporation tax (currently 19-25%) — became more tax-efficient for many landlords above ~£50k personal income.
Lenders responded by building dedicated SPV mortgage products. As of 2025/26, roughly 40+ UK lenders offer SPV BTL mortgages, ranging from high-street names with limited Ltd product (Barclays, NatWest, BM Solutions) to specialist BTL lenders who built their entire business around the Ltd landlord market (Paragon, Aldermore, Landbay, Foundation Home Loans, Kent Reliance).
The catch: most high-street lenders' SPV ranges are narrow, with stricter criteria than their personal BTL ranges. The bigger panel — and usually the better rates — sits with specialist BTL lenders accessed via a specialist broker.
Lender criteria for SPV mortgages
Most SPV lenders look at six things:
- SPV SIC code: Must be in the approved property-investment SIC codes (68209 or 68100). Trading SIC codes are usually rejected.
- Company age: Some lenders are fine with day-one SPVs (Aldermore, Paragon, Landbay). Others require 12-24 months trading history. Set up the SPV before you need the mortgage if possible.
- Director income: Lenders need to see directors can stand behind the company. Most want £25k+ personal income (salary, dividends, employment, pension). A few will lend without personal income if rental cover is strong.
- Property type: Standard single-let residential is easiest. HMOs, MUFBs (multi-unit freehold blocks), holiday lets, ex-local-authority, high-rise flats all narrow the panel.
- Rental cover ratio (RCR): The rent must cover the mortgage interest by a multiple — usually 125% for basic-rate-taxpayer directors, 145% for higher-rate. Stress-tested at a higher notional rate (typically 5.5%-7%).
- Deposit / LTV: 75% LTV is the standard maximum. 80% is available with some lenders. 85% is occasional. Below 75% gets you sharper rates.
Beyond the criteria, lenders increasingly assess "portfolio stress" — your existing BTL portfolio's overall debt-to-equity and rental coverage. A heavily-leveraged portfolio limits how much further you can borrow even if any individual deal looks fine.
SPV rates vs personal-name BTL
SPV mortgage rates are typically 0.3% to 0.8% higher than equivalent personal-name BTL rates from the same lender. The premium reflects lender perception of corporate-ownership risk and the smaller (though growing) SPV market.
| Product type | Typical rate spread vs personal BTL | Typical 2025/26 rate range |
|---|---|---|
| SPV — 75% LTV — 5-year fix | +0.4-0.6% | 5.2-6.1% |
| SPV — 65% LTV — 5-year fix | +0.3-0.5% | 4.8-5.6% |
| SPV — 75% LTV — 2-year fix | +0.5-0.8% | 5.6-6.5% |
| SPV — HMO 75% LTV — 5-year fix | +0.7-1.0% | 5.8-6.6% |
Why the rate premium isn't the whole story: the tax efficiency of holding via Ltd usually outweighs the 0.5%-ish rate premium for higher-rate-taxpayer landlords, because mortgage interest is fully deductible against corporation tax inside the SPV. The break-even point depends on your personal tax band, the loan size, and the property's rental yield — and it's why most multi-property landlords above ~£50k personal income end up in SPV structures despite the higher mortgage rate.
Deposits, LTV and stress tests
Standard SPV deposit requirements:
- 25% deposit (75% LTV): The default for most SPV BTL products. Widest lender panel, best rates.
- 20% deposit (80% LTV): Available from a smaller panel (Foundation, Kent Reliance, a few others). Rate premium of ~0.4-0.7% vs 75% LTV.
- 15% deposit (85% LTV): Rare. Foundation has occasionally offered it for clean cases; rate premium is significant.
The deposit must come from the SPV's funds — typically loaned in by directors as a "director's loan account" balance — or be a verifiable gift. Lenders source the deposit funds via bank statements (3-6 months); unexplained deposits get rejected.
Stress tests apply to whether the property's rent covers the mortgage. The formula:
What this means in practice: a £200k SPV BTL mortgage at 75% LTV needs roughly £1,100-£1,300/month rent depending on the lender's specific stress assumptions. Don't assume "current 5% interest = 5% stress test" — most lenders stress at the higher of (a) reversion rate + 1% or (b) 5.5%, whichever is greater.
SDLT for SPV purchases
SDLT (Stamp Duty Land Tax) on a SPV property purchase has three layers as of 2025/26:
- Standard residential SDLT — banded rates from 0% (under £125k) to 12% (above £1.5M).
- Additional property surcharge — 5% on top of standard rates. Applies to all SPV purchases regardless of whether it's your "first" SPV property, because the SPV is a corporate buyer.
- Non-natural person rate — only triggers above £500k purchase price. At 17% flat above £500k for "enveloped" dwellings. Most SPV landlords never hit this because their purchases are below £500k; if you're buying above, get specialist tax advice.
So for a typical SPV BTL purchase of £250,000:
- Standard SDLT on £250k = £2,500 (0% to £125k, 2% on next £125k)
- Plus 5% surcharge on £250k = £12,500
- Total SDLT = £15,000
Compare with a personal-name BTL on the same property: SDLT would also be £15,000 (the 5% surcharge applies to additional residential property purchases by individuals too, once you own more than one residential property). So SDLT is rarely the deciding factor between SPV and personal-name — the bigger driver is corporation tax vs personal income tax on rental income.
Common pitfalls when using an SPV for the first time
- Wrong SIC code on incorporation. If your accountant filed the SPV under a trading SIC code (e.g. 70229 "Other management consultancy activities") by accident, lenders will reject the application. Fix it by filing a Confirmation Statement update with the corrected SIC.
- Mixing personal and SPV deposits. Deposit funds need to be traceable to either director-loan capital injected into the SPV or a verifiable gift. Don't fund the SPV deposit from a mixed account where personal and SPV money flow together.
- Forgetting personal guarantees. Almost all SPV BTL mortgages require personal guarantees from the directors. That means the limited-liability protection of the SPV doesn't extend to the mortgage — if the SPV defaults, the lender comes after the directors personally.
- Annual accounts gap. Buying a property in month 11 of the SPV's first accounting period means you'll need to file accounts soon after, which the lender may want before drawdown. Coordinate with your accountant.
- Existing trading company. Trying to use an existing trading Ltd to buy a BTL almost always fails. Set up a separate SPV.
- HMO or holiday let bought into a standard SPV. Some lenders require a separate SPV per property type. HMOs in particular may need a dedicated HMO SPV depending on local authority licensing.