SPV Mortgage: The Complete UK Guide for Property Investors (2026)
An SPV mortgage, also called a limited company buy-to-let mortgage, is a mortgage taken out by a Special Purpose Vehicle (SPV) instead of an individual. The SPV is a private limited company registered at Companies House. Its only purpose is to buy, hold, and manage investment property.
The mortgage is in the company’s name. The company owns the property, and you own the company through its shares.
This differs from a personal buy-to-let mortgage, where you own the property in your own name. With an SPV mortgage, all rental income goes to the company. The company pays corporation tax on profits. You take out money as dividends or salary.
Property SPVs usually register with SIC code 68100 (buying and selling own real estate) or 68209 (other letting and operating of own or leased real estate). Using the correct SIC code is essential. Most SPV mortgage lenders require it as a condition of lending.
Why SPV mortgages have surged in 2026 — the Section 24 effect
Since 2016, the number of limited company buy-to-let mortgages has grown sharply. This change began when Section 24 of the Finance (No. 2) Act 2015 introduced restrictions on mortgage interest relief for individual landlords. By 2024, most new buy-to-let mortgage applications in the UK were made by limited companies.
The reason is straightforward. Under Section 24, individual landlords cannot fully deduct mortgage interest from rental income before calculating tax. Instead, they get only a 20% basic-rate tax credit. Higher-rate taxpayers paying 40% income tax repay tax on income not actually received. This tax is based on gross rent rather than net profit.
SPVs are outside the scope of mortgage interest restriction under section 24 entirely, because that restriction applies only to individuals. Companies are instead subject to corporation tax on property profits and may deduct mortgage interest as a business expense in full.
In 2026, rates are:
- 19% on augmented profits up to £50,000 (small profits rate)
- 25% on augmented profits above £250,000
- Marginal relief applies between these thresholds
For a higher-rate landlord with big mortgage costs, paying 40–45% income tax under Section 24 versus 19–25% corporation tax through an SPV is a significant difference. This gap can add up to thousands of pounds per property each year.
Income tax thresholds are frozen until 2031/32. As rents rise, more landlords will move into higher tax bands even if the rate does not change. For those planning to grow a portfolio, setting up an SPV at the start is usually the most tax-efficient way, rather than transferring later.
Step by Step on How SPV Mortgage Works
Incorporate the SPV
Register a private limited company at Companies House with the correct SIC code. The company must have at least one director, one shareholder, a registered office address, and Articles of Association. Most lenders require the company to be incorporated before you apply, not on the same day.
Fund the SPV
Investors put capital into the SPV via share subscriptions or director loans. This serves as the company’s deposit and initial working funds.
Apply for the SPV mortgage
The SPV applies for a buy-to-let mortgage in the company’s name. Lenders check the property’s rental income coverage ratio (ICR), the company’s SIC code, the directors’ personal credit, and the Shareholding Structure
Provide personal guarantees
Most SPV mortgage lenders require all directors and shareholders to sign personal guarantees. If the company defaults, guarantors are personally liable. This is a key difference from a standard limited company loan.
Purchase the property
Once you have the mortgage offer, the SPV buys the property. The property title is registered in the company's name at HM Land Registry, not in yours.
Collect rental income through the SPV
All rental income goes into the company’s bank account. The SPV pays the mortgage, covers costs, and makes a profit from this income. Corporation tax is paid on the profit. The rest can be taken as dividends or salary.
SPV mortgage lender requirements in 2026
SPV mortgage lenders apply stricter criteria than personal buy-to-let lenders. Review these requirements before applying to avoid rejections and unnecessary credit checks.
SIC code
The SPV must be registered under property SIC codes (68100 or 68209). Trading company SIC codes are not acceptable to most lenders. Using an incorrect SIC code can result in an automatic decline.
Most lenders accept up to four directors and four shareholders. All directors and major shareholders (usually 25% or more) will have their credit checked. Non-standard structures, such as non-voting shares, child shareholders, or overseas shareholders, are subject to additional review.
Personal guarantees
Required by almost all SPV mortgage lenders. The guarantee is typically unlimited unless specifically negotiated otherwise.
Many lenders prefer experienced landlords. Some will consider first-time landlords with a bigger deposit or higher income, but there are fewer options.
Most SPV mortgage lenders set a maximum loan-to-value of 75%, so you need a 25% deposit. Some want 30–35% for higher-risk properties or first-time landlords.
Lenders need
Lenders want rental income to cover the mortgage at a stressed rate of 125% to 145%. The exact ICR and stress rates depend on the lender. For a basic-rate SPV, some lenders use a lower ICR than for higher-rate taxpayers.
Some lenders require directors to have a minimum personal income, often £25,000. Others do not. Rules differ widely between lenders.
Many lenders require the company to be incorporated before the application, not on the same day.
Standard residential properties, HMOs, and multi-unit freehold blocks can use SPV mortgages. HMOs and MUFBs need specialist lenders, and each has different criteria. Non-standard construction properties significantly limit lenders’ choices.
SPV mortgage rates and costs: what to expect
SPV mortgage rates in 2026 are usually 0.5% to 1% higher than personal buy-to-let rates. The difference has narrowed over the past two years as the market has matured and competition has increased.
With a Bank of England base rate of 3.75% in early 2026, five-year fixed-rate SPV buy-to-let products from specialist lenders are 4.5%–5.5%, depending on LTV and application strength. Tracker products are also available at a margin above the base rate for investors comfortable with rate changes.
Typical cost summary for an SPV mortgage application:
Typical SPV mortgage costs
One-off and ongoing costs to factor into your budget — UK 2026
| Cost | Typical range |
|---|---|
|
Mortgage arrangement fee
Charged by the lender on completion
|
£1,000 – £2,500 |
|
Valuation fee
Lender's survey of the property
|
£300 – £600 |
|
Legal fees (company purchase)
Solicitor acting for the SPV
|
£1,500 – £3,000 |
|
Broker fee (if applicable)
Specialist SPV mortgage broker
|
£500 – £1,500 |
|
Annual accountancy
Accounts, CT600, confirmation statement filing
|
£500 – £1,500 /yr |
|
Companies House confirmation statement
Annual statutory filing requirement
|
£34 /yr |
A specialist SPV mortgage broker who covers the full market offers more products and lender options than a single lender. This matters for non-standard applications.
Advantages and Disadvantages of an SPV mortgage
SDLT and tax considerations when buying through an SPV in 2026
SDLT on purchase
When an SPV purchases residential property, it pays SDLT at the standard rates plus the 5% higher rates surcharge for additional dwellings (applicable from April 2025). On a £300,000 residential purchase, this results in materially higher SDLT than a first-time buyer would pay personally.
SDLT on share purchase
Purchasing shares in an existing property-owning SPV attracts only 0.5% stamp duty on the share value, not the property value. This is one reason why investors sometimes structure portfolio transactions as SPV share sales rather than direct property transfers. However, HMRC anti-avoidance provisions apply if the structure exists mainly to avoid SDLT.
Non-natural persons flat rate
Certain corporate purchases of a single dwelling valued at over £500,000 may fall within the 17% flat SDLT rate for non-natural persons, unless a relief applies (such as the property rental business relief). This is a significant SDLT trap and should be checked before any purchase in this value range.
Corporation tax on rental profit
All net rental income, after deductible expenses including full mortgage interest, is subject to corporation tax at 19–25%.
CGT on disposal
If the SPV sells a property, the gain is subject to corporation tax rather than personal CGT. The company does not benefit from the annual CGT exemption available to individuals.
All SDLT calculations above are based on 2026 rates. Rates are subject to change. Confirm current rates with a chartered tax adviser before the exchange of contracts.
Who can get an SPV mortgage?
SPV mortgages are available to:
- Experienced buy-to-let landlords looking to structure further purchases through a limited company.
- New landlords starting with a company structure from day one (accepted by a growing number of lenders)
- Portfolio landlords (four or more mortgaged properties) who may find the SPV structure simplifies lender reporting.
- Joint investors: two to four partners incorporating an SPV together
- Overseas investors: Non-UK residents can set up and direct a UK SPV, though the number of lenders willing to lend to companies with overseas directors is smaller, and additional due diligence is required.
You must be at least 21 years old. Most lenders require at least one director to have a minimum income (commonly £25,000, though this varies). A good personal credit history across all directors is important.
How to set up an SPV ready for a mortgage application
Getting the company structure right before you apply is one of the most overlooked parts of the SPV mortgage process. A poorly incorporated SPV, such as using the wrong SIC code, the wrong shareholding structure, or Articles of Association that do not match lender requirements, can delay or block a mortgage application entirely.
The key steps are:
- Choose the right SIC code: 68100 or 68209 for most buy-to-let SPVs. Confirm with your intended lender before incorporating.
- Set up the shareholding structure: Decide who owns shares and in what proportions. If you want to use multiple share classes for tax planning or investor participation, make sure the Articles of Association support this from the start.
- Draft bespoke Articles of Association: Standard model Articles do not always include provisions for multiple share classes, specific dividend rights, or the type of share structure lenders expect.
- Open a dedicated company bank account: Required for all mortgage applications and company operations.
- Register your company correctly: Companies House registration must be completed and confirmed before most lenders will progress an application.
PropertySPV provides a complete SPV formation service that covers each of these steps, including bespoke Articles of Association and Companies House filing, so your company is mortgage-ready from day one.
Set up your mortgage-ready SPV
FAQs
What is the difference between an SPV mortgage and a regular buy-to-let mortgage?
A regular buy-to-let mortgage is held in your personal name and assessed on your personal income and credit. An SPV mortgage is held in the name of a limited company. The key differences are: the company pays corporation tax rather than income tax on rental profits; the company can deduct 100% of mortgage interest (no Section 24 restriction); and mortgage rates are typically slightly higher than those for personal buy-to-let products.
Do I need a personal guarantee for an SPV mortgage?
Yes, in almost all cases. Most SPV mortgage lenders require a personal guarantee from all directors and any shareholder holding 25% or more of the company. This means you remain personally liable if the company defaults on the mortgage.
Can a first-time landlord get an SPV mortgage?
Yes, though options are narrower than for experienced landlords. Some lenders accept first-time landlords on SPV mortgages, particularly with a strong deposit (30%+) and good personal income. Using a specialist SPV mortgage broker will identify which lenders accept your profile.
What SIC code does my SPV need for a mortgage?
Most buy-to-let SPV mortgage lenders require SIC code 68100 (buying and selling of own real estate) or 68209 (other letting and operating of own or leased real estate). Using a trading company SIC code significantly reduces and in many cases eliminates lender options.
Can I transfer my existing properties into an SPV?
Technically, yes, but for most landlords, the costs make this unattractive. The transfer triggers SDLT (at market value, including the 5% additional dwelling surcharge), and potentially CGT on any accrued gain. Unless your portfolio is large enough that the ongoing tax savings outweigh these upfront costs, it is generally more efficient to use an SPV only for new purchases.
How many directors can an SPV have for a mortgage?
Most SPV mortgage lenders require a maximum of four directors. Some lenders restrict this further. All directors will be credit-checked personally and will typically be required to provide personal guarantees.
This article provides general information about SPV mortgages in the UK. It does not constitute financial or tax advice. Tax rates, SDLT rates, and lender criteria are correct as at June 2026 but are subject to change. Always consult a qualified chartered tax adviser and specialist mortgage broker before making property investment decisions.
Property SPV
Property SPV is a trusted platform dedicated to helping UK property investors streamline their journey by incorporating properties into Special Purpose Vehicle (SPV) companies. Whether you’re an experienced investor or just starting out, our mission is to simplify the complexities of SPV formation while ensuring you unlock valuable tax advantages and other benefits.