Property SPV vs. Personal Ownership: What Buy to Let Investors Should Know About Mortgage Rates and Lending Criteria

If you’re planning to invest in Buy to Let property, one of the first big decisions you’ll face is whether to buy in your own name or through a Limited Company, often referred to as an Set up spv property limited company . It’s not just a question of tax – mortgage rates and lending rules can vary quite a bit depending on which path you choose.

In this article, we’ll break down how the two options stack up when it comes to getting a mortgage, what lenders look for, and how the structure you choose could affect your investment over time.

Mortgage rates: Who gets the better deal?

Personal Ownership SPV Ownership

Buying a rental property in your own name

used to be the obvious route. It’s

straightforward, and individual Buy to Let

mortgages are widely available from

mainstream lenders. You’ll usually find slightly

lower interest rates here – sometimes by half a

percent or so – compared to company

mortgages.

If you’ve got a good credit score and a steady

income, you’ll likely qualify for a decent deal.

As of now, rates for individual landlords hover

around 4.5% to 5.5%, depending on loan size,

LTV (loan-to-value), and the property itself. Mortgages through a Limited Company SPV for Buy to Let Property Investment do tend to cost a little more. Lenders view company borrowing as slightly higher risk, and the admin involved is a bit more complex. That said, the gap in rates is narrowing. Specialist lenders are stepping up with competitive deals, and for many investors, the tax advantages of using a company structure can more than make up for a slightly higher interest rate.

Lending criteria: What do lenders actually look at?

If you’re buying personally If you’re buying through an SPV

Lenders will take a close look at your personal

finances. That means your income, credit

history, and how much debt you’re already

carrying. They’ll also want to see that the rent

from your new property will more than cover

the mortgage payments – usually by 125% to

145%, depending on whether you’re a basic or

higher-rate taxpayer.

First-time landlords might have a few more

hoops to jump through – like minimum income

requirements or restrictions on the number of

properties you can own. The process is a bit different. Lenders are more focused on the numbers behind the property deal and the health of the SPV itself. But they’ll still look at the directors of the company – usually you – and check your credit history and experience as a landlord. You’ll also need to set up the company properly. That means registering it with the correct SIC code (such as 68100 or 68209, which relate to property letting and management), and being prepared to sign a personal guarantee. Rental coverage ratios are often a bit stricter for company mortgages – sometimes 145% or higher – but the big plus here is that companies can still fully deduct mortgage interest as a

business expense. That’s no longer the case if you’re investing personally.

Conclusion

There’s no one-size-fits-all answer here. If you’re buying your first rental and want to keep things easy, personal ownership might work just fine. But if you’re thinking longer term, or planning to build a sizeable portfolio, an SPV could offer more advantages – even if the mortgage looks a bit pricier upfront.

Whichever route you go down, it’s worth speaking to a mortgage broker and a tax adviser who understands Limited Company SPV for Buy to Let Property Investment. The right structure can save you a lot of hassle – and money – down the line.