Landlords with active limited companies no longer need an SPV

Since the Exchequer started the process of eliminating tax relief on mortgage interest, The Special Purpose Vehicle (SPV) option has seen many landlords set up new limited companies to better manage their property portfolios.

However, we can now offer an exciting alternative for landlords with existing active trading limited companies.

Instead of setting up a new SPV, landlords with a business run via a trading limited company can use it for their property portfolios or future BTL purchases.

The facility means more efficient use of an existing legal entity and will particularly benefit business owners who are ‘occasional’ landlords with smaller portfolios.

There are also other advantages:

1.       Instead of taking surplus profits out of a limited company and incurring a potential tax liability, an alternative option is to invest in property via the trading limited company. By using surplus profits within the company as a deposit on a property, a BTL mortgage can then finance the remainder.

2.       It can offer a useful alternative to a conventional secured business loan requiring a restrictive debenture or other charge.  A trading limited company that already owns a property can take out a BTL mortgage on the property which potentially offers greater flexibility. Cashflow can also be further improved as mortgage terms of up to 30 years are available on an interest-only basis.

It’s worth noting that we underwrite applications from trading limited companies in exactly the same way as an SPV.

We are one of the few lenders with expertise in all types of company structure and our trading limited company option might be exactly what your client needs.

For more information or to discuss any of your BTL cases please get in touch using our BDM finder.