Placing limited company buy-to-let cases: a broker’s guide

Limited company buy-to-let now makes up the majority of new buy-to-let lending, so company cases land on brokers’ desks constantly. But “limited company” covers a wide range, from a clean special purpose vehicle to trading companies, LLPs, multiple shareholders, and group structures, and each affects how the case places. This guide is about the lending: what lenders look for in a company case, how the structure changes the pool of lenders who will lend, and how to package a company case so it completes. The decision on how to hold the property is the client’s, made with their accountant. The broker’s job starts once the structure is set, and that is what this guide covers.

Why company cases come to brokers

The restriction of mortgage interest relief for individual landlords pushed a large share of buy-to-let into limited companies, and that share keeps growing. Company lending is also heavily criteria-driven and much of it is intermediary-only, so these cases naturally route through brokers. The value you add is knowing which lenders accept which structures, because that is what decides whether a company case places cleanly or bounces.

The SPV: the case lenders like

Most limited company buy-to-let runs through a special purpose vehicle, a company set up solely to hold property with no other activity. Lenders like SPVs because a clean, single-purpose company is simple to assess, and a clean SPV opens the widest choice of lenders.

The key is that the SPV is genuinely single-purpose and correctly set up from the outset. Where it is, the case behaves much like any other buy-to-let case, with the structure a formality rather than a complication.

SIC codes

Lenders expect a property company to carry the right property-related SIC codes, the codes on the company record that describe what it does. The most common is 68209, for letting and operating your own real estate. A company set up with the wrong codes, or without property codes at all, can cause problems at application, so it is worth checking the SIC codes early, ideally before the decision in principle, and having the client correct them if needed.

Trading companies and mixed-activity companies

A trading company, one that does something other than, or as well as, holding property, is harder to place. Fewer lenders will consider lending to a trading company, and those that do apply more scrutiny, because the company’s other activities affect the risk. Where property sits in a trading company, moving it into a clean SPV is a decision for the client’s accountant, and a taxable event, so it is not a quick fix. For the broker, the practical point is that a trading company narrows the lender pool from the outset.

Shareholders and directors

Who owns and runs the company matters to lenders as much as the company itself, and this is where company cases most often trip up.

Clients frequently add family members as shareholders for tax or succession reasons, which is legitimate but has lending consequences. Many lenders require all significant shareholders, commonly those above a set percentage, often in the region of 20 to 25%, to be party to the mortgage and to give personal guarantees. Some lenders cap the number of shareholders or directors they will accept, and shareholders who are minors, or who live abroad, narrow the options further.

Establish the full shareholder and director structure at the start of the case, not at submission, because a structure that is tax-efficient on paper can be difficult to place if it does not fit lender criteria. It is one of the most common causes of a company case stalling.

Personal guarantees

Lending to a limited company almost always involves personal guarantees from the directors, and often from significant shareholders. The company is the borrower, but the individuals stand behind the debt personally. This is standard, and worth setting out clearly with the client early, so the guarantee is understood before offer rather than raised as a surprise. Lenders’ guarantee terms and the parties they require can differ, so it is a criteria point to check per lender on more complex shareholdings.

LLPs, group and complex structures

Beyond the standard SPV, the pool narrows quickly. Limited liability partnerships are financed by fewer lenders and are more specialist. Group structures, a holding company owning several SPVs, add inter-company relationships and often cross-guarantees, which a smaller set of lenders will engage with and which need more involved underwriting. Trusts and hybrid arrangements are narrower still and sit firmly in specialist territory.

None of these are unplaceable, but each requires a lender with genuine appetite for that structure, so identifying the structure early and targeting the right lenders is essential.

How structure affects placeability

There is a clear thread here, and it is the same one that runs through complex cases generally. The simpler and cleaner the structure, the wider the choice of lenders. A clean SPV places almost anywhere that lends to companies. A trading company, an LLP, multiple or overseas shareholders, a group structure, or a trust each narrows the field, because each adds something a lender has to assess and not every lender will.

Placing a company case well is therefore about matching the specific structure to lenders whose criteria accept it, rather than assuming any company case will fit any company lender. The more elaborate the structure, the smaller the pool, and the more your knowledge of lender appetite is worth.

Packaging a limited company case

A well-packaged company case gets a faster and better answer. Have the essentials ready up front:

• The company details and incorporation, and confirmation of the correct property SIC codes.
• The full shareholder and director list, with percentages, so any personal guarantee and party requirements are clear from the start.
• An explanation of any complexity in the structure, a trading element, a group arrangement, an overseas or minor shareholder, rather than leaving the lender to find it.
• Realistic valuation and affordability expectations for the case.

Pre-qualifying against lenders with genuine appetite for the structure, before you submit, avoids wasted declines on cases that were never going to fit that lender’s company criteria.

Quick placement checklist

Run any limited company case through these before you place it:

• Is it a clean SPV, or a trading company or more complex structure?
• Are the property SIC codes correct on the company record?
• Who are the shareholders and directors, and what percentages do they hold?
• Which significant shareholders will need to be party to the mortgage and give personal guarantees?
• Does the structure include an LLP, group, trust, or overseas or minor shareholder that narrows the pool?
• Which lenders have genuine appetite for this specific structure?
• Is the case packaged with the structure explained and evidenced up front?

Frequently asked questions

What company structures do lenders accept for buy-to-let?
Most lenders that offer company lending are set up for clean SPVs. Trading companies, LLPs, group structures, and trusts are accepted by a smaller and more specialist set of lenders, so the structure decides the size of the lender pool.

Do all shareholders need to be on the mortgage?
Often, yes. Many lenders require significant shareholders, commonly those above around 20 to 25%, to be party to the mortgage and to give personal guarantees, and some cap the number of shareholders or directors, so the shareholder structure directly affects who will lend.

What SIC codes do lenders want on a property company?
Property-related SIC codes, most commonly 68209 for letting and operating your own real estate. Missing or incorrect codes can hold up an application, so it is worth confirming them before the decision in principle.

Can you place LLP or trading company cases?
Yes, but with fewer lenders than a clean SPV. Both are more specialist, so they need a lender with genuine appetite for that structure, which makes early identification and targeting important.

Are personal guarantees always required on company lending?
Almost always, from the directors and often from significant shareholders. Terms and the parties required vary by lender, so it is a criteria point to confirm on more complex shareholdings.

How does the company structure affect which lenders I can use?
The cleaner and simpler the structure, the wider the choice. Each added layer, a trading element, an LLP, a group structure, or an unusual shareholder, narrows the pool of lenders whose criteria accept it, so the structure has to be matched to lender appetite.

Match the structure to the lender

Limited company buy-to-let is placed by matching the specific structure to lenders whose criteria accept it, not by assuming any company case fits any company lender. Establish the structure and the shareholders early, get the SIC codes and guarantees right, package the case with the structure explained up front, and target lenders with genuine appetite for it.

Buy to let is all we do. If you want to talk through a limited company or complex-structure case, get in touch with your local BDM.