The most common objection we hear from landlords setting up their first company is a version of the same worry: "My SPV was only incorporated last week, it has never traded, it has no accounts, and I take almost no personal income, so no lender will touch me." It feels like a hard barrier. In practice it is one of the most routine cases the specialist buy-to-let market handles, because a newly-formed Special Purpose Vehicle with a low-income director is not underwritten the way a business loan or a residential mortgage is. It is underwritten on the property.
This page is about the specific case of a brand-new SPV with no trading history and a director with little or no personal earned income. It covers how the lending is actually assessed, where the minimum-income floor bites and where it does not, what the personal guarantee does, and how newly-formed, dormant and trading companies differ to a lender. For SPV lending more broadly (what an SPV means to a lender, personal guarantees, rates versus personal borrowing) see our SPV mortgages explained guide, and for the full picture of how buy-to-let lending works (interest coverage, loan-to-value, lender types) start with the buy-to-let mortgages guide.
The objection, and why it is not the blocker it seems
The instinct that a new company with no income cannot borrow comes from how other kinds of lending work. A business loan or an overdraft is underwritten on the company's trading record, its cash flow and its filed accounts. A residential mortgage is underwritten on the borrower's salary and outgoings. A brand-new SPV with a no-income director fails both of those tests, so it is natural to assume it fails buy-to-let lending too.
It does not, because SPV buy-to-let is a different animal. The lender is not lending against the company's earnings or the director's salary. It is lending against a specific rental property and the income that property produces, with a director's personal guarantee sitting behind the debt. A company that was incorporated days ago and has never earned a penny is exactly the clean, single-purpose borrower the specialist market is built to lend to. The absence of trading history is a feature, not a defect: there are no legacy creditors, no unrelated liabilities and no messy accounts to unpick.
So the two things that feel like fatal problems (no accounts, no income) are the two things that matter least in this particular kind of lending.
How an SPV mortgage is actually underwritten
For a first purchase by a newly-formed SPV, the underwriter looks at four things, none of which is company accounts or director salary:
- The property and its valuation. The security is the property itself. The lender instructs a valuation and lends a percentage of it, typically up to 75% loan-to-value (a 25% deposit), sometimes up to 80% at higher rates. This loan-to-value band is the same one that applies to personal buy-to-let.
- The rental income against the interest coverage ratio. This is the affordability test, and it is done on the rent, not on you. Limited-company and SPV borrowers are assessed at a 125% interest coverage ratio (ICR), meaning the rent must cover 125% of the mortgage interest calculated at a stress rate, commonly around 5.5% or the product rate plus a margin. The Bank of England's Prudential Regulation Authority sets the framework for this in its supervisory statement on underwriting standards for buy-to-let mortgage contracts (SS13/16).
- The deposit and its source. Usually put into the company as a director's loan, with the source of funds evidenced for anti-money-laundering purposes.
- The director's personal guarantee and credit profile. The individual behind the company stands behind the debt, and their credit history is checked, but their income is often not part of the affordability sum at all.
Notice what is missing from that list: the company's profit, the company's accounts, and the director's salary. For a clean first purchase, they are not the basis of the decision.
A worked example: a day-old SPV, a £0-income director
Take a company incorporated this month, SIC code 68209, no trading, no accounts, no debt. Its single director draws no salary and no dividends from it. The company buys a £200,000 flat that will rent for £1,100 a month.
| Item | Figure |
|---|---|
| Property value / purchase price | £200,000 |
| Loan at 75% loan-to-value | £150,000 |
| Deposit (director's loan into the SPV) | £50,000 |
| Stress interest rate | 5.5% |
| Interest coverage ratio (SPV) | 125% |
| Annual interest at the stress rate (£150,000 × 5.5%) | £8,250 |
| Rent the ICR requires (£8,250 × 125% ÷ 12) | circa £859 / month |
| Actual rent | £1,100 / month |
| Result | Clears, with headroom |
The £1,100 rent comfortably beats the circa £859 the interest coverage ratio demands, so the case is affordable to the lender. The director's £0 income never enters that calculation, and the company's non-existent accounts are irrelevant. What supports the £150,000 loan is the property, the rent and the director's personal guarantee. This is the whole point of the SPV structure for a no-income borrower: the covenant work is done by the rent and the guarantee, not by the salary.
The stress rate and interest coverage ratio move with the market and vary by lender and product (a five-year fixed product or a pound-for-pound remortgage is often stressed lower than a two-year product), so treat the 5.5% as a typical figure to verify at the time. You can run your own numbers on our buy-to-let rental stress test calculator and size a loan on the buy-to-let mortgage calculator.
The minimum-income question: where it bites and where it does not
The one real complication in a no-income case is that lenders split into two camps on personal income.
A large part of the specialist SPV market applies no minimum director income at all. These lenders rely entirely on the rent clearing the interest coverage ratio and on the personal guarantee. For a director drawing nothing from the company (or from anywhere), these are the lenders the case is placed with, and there are enough of them that a genuinely income-free applicant with a sound property and a clean credit history is placeable.
A second group of lenders still asks for a minimum personal income, commonly around £25,000. This is not usually a strict affordability calculation (the rent already does that job), it is a credibility and fallback check: evidence that the director could service the debt personally in a void period. Some of these lenders count any income (employment, self-employment, pension, other property, even a spouse's income in a joint application), so a director who takes no salary from the SPV but has income elsewhere may still qualify.
The practical upshot: a no-income case does not fail, it narrows. It moves from the whole market down to the no-minimum-income lenders. The risk is applying to the wrong lender and collecting a decline at the decision-in-principle stage, which is exactly the kind of criteria matching a specialist broker exists to handle.
The personal guarantee: what carries the covenant
If the company has no accounts and the director has no income, something has to give the lender comfort. That something is the personal guarantee.
Each director, and often each significant shareholder, signs a personal guarantee making them individually liable for the mortgage debt if the SPV defaults and the sale of the property does not cover what is owed. This converts an assetless, income-free company into a real credit risk the lender can price, because there is a named person standing behind it. It is why a day-old SPV with no covenant of its own can borrow: the covenant is the individual, not the company.
Practical points on the guarantee for a no-income case:
- The guarantee is standard and unavoidable on SPV lending. Treat any expectation of "no personal guarantee" on a first SPV purchase as unrealistic.
- Some lenders cap the guarantee at a percentage of the loan (for example 100% or 125%) rather than leaving it unlimited. This is worth checking.
- Because the guarantee does the covenant work, the director's credit profile matters more than their income. A clean credit history strengthens a no-income case; adverse credit weakens it far more than a low salary does.
- All directors and material shareholders usually have to give guarantees, so the structure of who owns and controls the SPV affects who is on the hook. Plan the shareholding before you incorporate.
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Newly-formed, dormant and trading: how lenders read the company
Not every company with no recent trading is treated the same. Lenders read the company's history and SIC code carefully, and three situations behave differently:
- Newly-formed SPV (the easy case). Incorporated recently, registered with a property SIC code, has never done anything except exist for the purpose of buying this property. This is the cleanest possible borrower and the one the specialist market is designed for. No accounts is expected, not a problem.
- Dormant company. A company that has been incorporated for a while and filed dormant accounts, having never traded. Usable, but the lender will ask why it has been sitting dormant and what its SIC code and prior intentions were. In many cases it is simpler to incorporate a fresh clean SPV than to repurpose an old dormant shell.
- Previously trading company. A company that traded in something unrelated (a consultancy, a shop) and now wants to hold property, or has switched to a property SIC code. This is the hardest of the three, because the lender must consider legacy creditors and liabilities, and many will decline a company that is not a clean single-purpose vehicle. This is a different case from a newly-formed SPV, and it is where the SIC code becomes decisive.
The SIC code you register is what tells the lender which of these you are, and the wrong code can get a case declined before valuation. If your company is registered under a trading code such as 68100 (buying and selling of own real estate) rather than 68209, read our guide to the correct SIC code for an SPV property company before you apply. To get the whole company set up so lenders will accept it from day one, see how to set up a property investment company. The Companies House incorporation process takes minutes and can be completed the same week you apply for the mortgage.
Buying with cash first, then remortgaging on day one
A related route for a no-income, newly-formed SPV is to buy the property outright (with cash, or bridging finance, or at auction) into the company and then remortgage immediately to release the deposit back out. This runs into the standard six-month ownership rule that most lenders apply, so it needs a lender that will remortgage inside six months of purchase. That is a specific mechanic covered in our guide to the day-one remortgage for a limited company. The affordability test on the remortgage is the same interest coverage calculation shown above, so a no-income director is no more of an obstacle on the refinance than on a purchase.
The tax overlay: why the SPV exists in the first place
It is worth stepping back to why so many landlords are incorporating a company and hitting the no-income question at all. The driver is tax, not finance. Since the phasing-in of the Section 24 finance-cost restriction, individual landlords no longer deduct mortgage interest from rental profit; they receive only a 20% basic-rate tax credit, which can push a higher-rate landlord's effective tax well above their headline rate. A company, by contrast, deducts its finance costs in full against profit. That single difference is the main reason SPV buy-to-let demand exists, and it is also why SPV borrowers get the lower 125% interest coverage ratio rather than the 145% applied to higher-rate individuals.
This is a tax decision, and we do not re-argue it here. If you are weighing up whether to buy through a company at all, read the limited company versus personal ownership tax comparison, and for the mechanics of the interest restriction itself see the Section 24 tax relief complete guide. For the structure and tax of the SPV (share classes, director's loans, corporation tax, extraction) see the property SPV structure and tax guide. The finance side (getting a day-old, no-income company its mortgage) is what this page covers; the tax side is a separate piece of the same decision.
What we do, and the line we do not cross
An SPV buy-to-let mortgage is unregulated business lending. Lending to a limited company for the business purpose of holding and letting property as an investment sits outside the Financial Conduct Authority's regulated-mortgage regime, as the Regulated Activities Order 2001 (Article 60C) and the FCA's PERG 4.10A guidance set out. That is different from a regulated mortgage contract, which is consumer lending where the borrower or a close relative occupies the property as a home. An SPV cannot occupy a home, so this lending is firmly in the unregulated business space.
Where we help is the tax and structure side of the purchase (the SPV set-up, the Section 24 position, deposit efficiency through director's loans) and, if it is useful to you, a bare introduction to a business-finance broker who handles limited-company and newly-formed SPV lending. That introduction is a name passed on with your consent, not advice on, negotiation of, or a recommendation of any specific product or lender, in line with the introduction carve-out in Article 25 of the Regulated Activities Order and the financial-promotion restriction in section 21 of FSMA 2000. If instead you are looking to buy a property for yourself or a relative to live in, that is a regulated mortgage and not something we introduce; speak to an FCA-authorised mortgage adviser. The exact wording of our introduction is being finalised with our solicitors; the guidance on this page stands regardless.