Limited Company Buy to Let Mortgages in 2026: Should Kent Landlords Use an SPV or Buy in Their Own Name?
Written by the mortgage advisers at Yomo Finance, whole-of-market brokers based in Rochester, advising landlords across Medway, Kent and the wider UK.
TL;DR: Is a limited company buy to let mortgage better than buying in your own name?
A limited company buy to let mortgage is a loan made to a company, usually a Special Purpose Vehicle (SPV), rather than to you personally. The main reason landlords use one is tax. A company can still deduct mortgage interest in full as a business expense and pays corporation tax on the remaining profit, starting at 19 percent on profits up to 50,000 pounds. An individual landlord cannot deduct that interest because of Section 24, and instead receives a flat 20 percent tax credit, which pushes many higher-rate taxpayers into paying tax on income they never actually keep.
As a rule of thumb in 2026: if you are a higher-rate taxpayer, borrowing at meaningful loan to value, and plan to keep and grow the portfolio, a limited company usually wins. If you are a basic-rate taxpayer with one property, or you own it outright with no mortgage, buying personally is often simpler and cheaper. Company borrowing also passes a gentler stress test, typically 125 percent rental cover rather than 145 percent, which means you can frequently borrow more through a company on the same rent.
Over 75 percent of new buy to let applications in Kent now come through limited companies or SPVs rather than individuals. That shift is not a fashion. It is a direct response to a tax rule that changed the economics of leveraged landlording, combined with a stamp duty surcharge that now takes 5 percent off the top of every purchase. This guide explains how limited company buy to let mortgages actually work, what they cost, when the structure genuinely pays, and when it quietly does not.
What is a limited company buy to let mortgage?
It is a buy to let mortgage where the borrower is a company, and you are the director and shareholder. The property is owned by the company. The rent is company income. The mortgage sits on the company's balance sheet.
Almost every lender in this space wants that company to be an SPV: a limited company set up purely to hold and let property, doing nothing else. Trading companies (your building firm, your consultancy) can sometimes borrow, but the lender pool shrinks sharply and pricing worsens, because the lender then has to underwrite your trading risk as well as the property.
Two practical points that catch people out. First, the lender will almost always require personal guarantees from the directors, so the company structure does not shield you from the debt in the way people assume. Second, the SPV needs the right SIC codes registered at Companies House. The one that matters is 68209, "other letting and operating of own or leased real estate", and it should be your primary code. Several lenders, including Paragon and Fleet, will decline an SPV registered only under 68100, because that code reads as property trading rather than rental investment. Companies House lets you list up to four codes, so you can add 68100 or 68320 alongside, but do not lead with them. Setting up with the wrong primary code is the single most common reason an application stalls before it starts.
Why do landlords use a limited company? Section 24 explained
Section 24 of the Finance (No. 2) Act 2015 was phased in between 2017 and 2020. It stopped individual landlords deducting mortgage interest as an expense. Instead you declare the full rent as income, and then receive a tax credit worth 20 percent of your mortgage interest.
For a basic-rate taxpayer, that is roughly neutral. For a higher-rate taxpayer it is not, because you are taxed at 40 or 45 percent on income that partly goes straight to the lender, but only credited back at 20 percent.
One change to plan for: separate property income tax rates take effect from April 2027, and the finance cost credit rises from 20 percent to 22 percent alongside them. That softens the Section 24 effect slightly, but it does not remove it, and property income rates rise at the same time.
Here is the effect on a single Medway property. Assume rent of 14,400 pounds a year (1,200 pounds a month) and mortgage interest of 9,000 pounds a year, with 1,500 pounds of other allowable costs.
Personal name (40 percent taxpayer) | Limited company (SPV) | |
Rent received | 14,400 pounds | 14,400 pounds |
Mortgage interest deducted | Not deductible | 9,000 pounds |
Other costs deducted | 1,500 pounds | 1,500 pounds |
Taxable profit | 12,900 pounds | 3,900 pounds |
Tax before credit | 5,160 pounds at 40 percent | 741 pounds at 19 percent |
Section 24 credit at 20 percent | Minus 1,800 pounds | Not applicable |
Tax due | 3,360 pounds | 741 pounds |
Real cash profit after tax | 540 pounds | 3,159 pounds |
The company retains roughly 2,600 pounds more per year on one modest property. Across four or five properties the gap becomes the difference between a portfolio that funds itself and one that does not. Note that company profits are taxed again when you extract them as dividends, so the comparison is fairest when you are reinvesting rather than drawing income. That distinction matters and is covered below.
One trap worth knowing if you are tempted to set up a separate SPV per property: the corporation tax thresholds are divided by the number of associated companies. Two companies halves them to 25,000 and 125,000 pounds, three splits them three ways, and so on. Spreading a portfolio across several companies can therefore push profits into the 26.5 percent marginal band sooner than expected. Most landlords are better served by one SPV holding several properties, unless there is a specific lending or ownership reason to separate them.
Limited company vs personal name: the honest comparison
Factor | Limited company (SPV) | Personal name |
Mortgage interest relief | Fully deductible | 20 percent tax credit only |
Tax on profit | Corporation tax, 19 percent up to 50,000 pounds | Income tax at 20, 40 or 45 percent |
Typical stress test | Around 125 percent rental cover | Around 145 percent for higher-rate taxpayers |
Typical mortgage rates | Slightly higher, often 0.2 to 0.5 percent more | Slightly lower |
Typical arrangement fees | Higher, often 1.5 to 3 percent of the loan | Often lower or flat fee |
Lender choice | Good and growing, but narrower than personal | Widest choice |
Extracting income | Dividend or salary, taxed again | Rent is yours directly |
Admin burden | Annual accounts, corporation tax return, confirmation statement | Self Assessment only |
Selling the property | Corporation tax on the gain, no CGT allowance | Capital Gains Tax, with annual allowance |
Inheritance planning | Shares can be gifted gradually | Property must be transferred whole |
The honest summary: a company is a better long-term container for a growing, leveraged portfolio, and a worse one for a single property you plan to draw income from and sell within a few years.
How much deposit do you need for a limited company buy to let?
Expect 25 percent as the working minimum, which puts you at 75 percent loan to value. A small number of lenders will consider 20 percent, and rates improve noticeably if you can reach 65 or 60 percent loan to value.
The bigger constraint is usually not the deposit but the rental stress test. Lenders check whether the rent covers the mortgage interest by a set margin, called the interest cover ratio. In 2026 the common thresholds are 125 percent for limited companies and basic-rate taxpayers, and 145 percent for higher-rate taxpayers borrowing personally. Lenders apply a stressed notional rate rather than your actual pay rate, typically around 6.5 to 8 percent on two-year fixes, but often only 4.5 to 5.5 percent on five-year fixes.
This is why five-year fixed rates dominate the limited company market. The gentler stress rate on a five-year product can lift your maximum loan by tens of thousands of pounds on the same property and the same rent. If a purchase in Medway or Chatham is falling just short on affordability, switching the product term is usually the first lever a broker pulls, before touching the deposit.
What do limited company buy to let mortgages cost in 2026?
The Bank of England held the base rate at 3.75 percent on 30 July 2026, with the next decision due on 17 September 2026. Against that backdrop, limited company buy to let fixed rates have generally sat a little above personal buy to let rates, with the gap having narrowed considerably as more lenders entered the market. Kent Reliance, for example, has run limited edition buy to let fixed rates from 3.99 percent this year.
The rate is only half the picture. Arrangement fees on limited company products are often percentage-based, commonly 1.5 to 3 percent of the loan, and a headline rate of 4.19 percent with a 3 percent fee can easily cost more over a five-year term than 4.59 percent with a flat 999 pound fee. On a 200,000 pound loan, that 3 percent fee is 6,000 pounds. Always compare the true cost over the full fixed period, not the rate on the poster.
Budget separately for company formation (around 50 pounds at Companies House), accountancy (typically 600 to 1,500 pounds a year for a small SPV), a higher legal fee because the lender's solicitor deals with a corporate borrower, and the personal guarantee, which some lenders require you to take independent legal advice on.
Should you transfer an existing buy to let into a limited company?
Usually not, and this is where a lot of landlords get poor advice.
Moving a property you already own into your own company is legally a sale from you to the company at market value. That triggers two immediate bills. First, Capital Gains Tax on any increase in value since you bought it. Second, Stamp Duty Land Tax at full rates plus the 5 percent additional dwelling surcharge, which has applied to every buy to let purchase in England since October 2024. On a 300,000 pound property, the surcharge alone is 15,000 pounds on top of a standard 5,000 pound bill.
For a single property, those costs commonly exceed a decade or more of Section 24 savings. There are reliefs, notably incorporation relief where a portfolio is run as a genuine partnership business, but the qualifying tests are strict and you need a specialist tax adviser rather than a broker to confirm them.
The practical conclusion for most Kent landlords: leave existing personally owned properties where they are, and buy the next one through a company. That hybrid approach is what the majority of growing portfolios actually look like.
Can you get a limited company mortgage on an HMO or a block of flats?
Yes, and it is common. Higher-yielding property types are exactly where the tax saving compounds fastest, because the rent, and therefore the profit exposed to Section 24, is larger.
Limited company lending is well established for HMOs, and our guide to remortgaging an HMO in Kent covers how valuations and licensing feed into the loan you can raise. For a converted block held on one title, the specialist route is a multi-unit freehold block mortgage, where lenders will usually accept an SPV borrower as standard. If you are new to the sector, start with our explainer on how HMO mortgages work.
One caution: lender numbers thin out as you combine complexity. A limited company borrower buying a seven-bed licensed HMO above a commercial unit is a specialist case, not a comparison-site case.
Who does a limited company buy to let suit in Kent?
It tends to suit:
Higher-rate or additional-rate taxpayers with mortgaged rental property
Landlords planning to buy more property and reinvest the profits rather than draw them
Anyone buying HMOs, multi-unit blocks or other higher-yield stock
Landlords thinking about passing property to family over time, since shares transfer more easily than bricks
Couples who want to split shareholdings to use both tax positions
It tends not to suit:
Basic-rate taxpayers with one or two properties
Landlords buying with cash or very low borrowing, where interest relief is irrelevant
Anyone who needs the rental income to live on right now
Landlords planning to sell within a few years
If you are self-employed, the underwriting of your own income runs alongside the company application, and lenders assess it differently again. Our guide to self-employed mortgages in Kent explains what they look for.
How a Kent mortgage broker helps with SPV buy to let
Limited company buy to let is not a market you can shop properly on a comparison site. Much of it sits with specialist lenders who only accept business through intermediaries, pricing swings on fee structure rather than headline rate, and criteria on SIC codes, director count, personal guarantees and shareholder residency differ from lender to lender in ways that are not published.
At Yomo Finance we are whole-of-market advisers based in Rochester, comparing products from a wide panel of lenders for landlords across Medway, Kent and nationwide. We will model the personal versus company comparison on your actual numbers, tell you honestly when the structure is not worth it, and coordinate with your accountant rather than around them. Yomo Finance Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority.
Learn more about our buy to let mortgage advice, or start your enquiry for a no-obligation conversation about your next purchase.
Please note that most forms of buy to let mortgage are not regulated by the Financial Conduct Authority, and that tax treatment depends on individual circumstances and may change. This article is general information, not tax advice.
Frequently asked questions
What is an SPV for buy to let?
An SPV is a Special Purpose Vehicle, a limited company set up solely to buy, hold and let property. Lenders prefer SPVs because the company does nothing else, so the only risk they need to assess is the property. The company must be registered at Companies House under a property SIC code, and 68209, other letting and operating of own or leased real estate, is the one most lenders want to see as the primary code.
Are limited company buy to let mortgage rates higher?
Slightly, though the gap has narrowed. In 2026 limited company products typically price a little above equivalent personal buy to let deals, and often carry percentage-based arrangement fees of 1.5 to 3 percent. For higher-rate taxpayers the corporation tax saving usually outweighs the extra borrowing cost.
Can I get a limited company buy to let mortgage as a first-time landlord?
Yes. Several lenders accept first-time landlords borrowing through an SPV, though some require you to already own your own home, and a few restrict first-time landlord and first-time buyer combinations. Criteria vary widely, so it is worth checking eligibility before you form the company.
Do I need a personal guarantee for an SPV mortgage?
Almost always. Lenders require directors and significant shareholders to give personal guarantees, typically covering the full loan. Some lenders ask you to take independent legal advice on the guarantee before completion, which adds a small cost and a few days to the timeline.
How much deposit do I need for a limited company buy to let?
Usually 25 percent, giving 75 percent loan to value, although some lenders will consider 20 percent. Rates improve meaningfully at 65 percent loan to value and below. The rental stress test often limits borrowing before the deposit does.
Is it worth moving my existing buy to let into a limited company?
Often not. The transfer counts as a sale, triggering Capital Gains Tax and a full Stamp Duty bill including the 5 percent additional property surcharge. For one property those costs can outweigh many years of tax savings. Most landlords keep existing properties personally and buy new ones through a company.
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