An SPV mortgage is a buy-to-let loan made to a company rather than to you personally. The company is a Special Purpose Vehicle, a limited company set up for the single purpose of holding and letting property. To a mortgage lender, the word SPV is not a product name or a legal category, it is a description of a clean, single-purpose borrower that carries no unrelated business risk. This page is about SPVs for mortgage purposes: what lenders mean by the term, which SIC codes they accept, whether a day-old company can borrow, how personal guarantees work, and how SPV rates and loan-to-value compare with borrowing in your own name.
The structure and tax mechanics of an SPV (share classes, director loans, corporation tax, dividend extraction, ATED) are covered in depth in our property SPV structure and tax guide. This page deliberately stays on the finance side and cross-links the tax where it matters. If you are still weighing up whether to buy through a company at all, start with the limited company versus personal ownership tax comparison. For how buy-to-let lending works more broadly (ICR, loan-to-value, interest-only and lender types), see our buy-to-let mortgages guide.
What an SPV means to a mortgage lender
There is no separate legal form called an SPV in English company law. An SPV is an ordinary private limited company whose activity is confined, by its SIC code, its articles and its actual trading, to holding and letting property. The "special purpose" is simply that it does one thing and nothing else.
Lenders prefer an SPV to a general trading company for a straightforward risk reason. A trading company (a shop, a consultancy, a construction firm) can accumulate trade creditors, employment liabilities, litigation and cash-flow risk that have nothing to do with the rental property but which rank alongside the mortgage. A clean SPV has none of that. Its only liabilities are the mortgage, the property costs and the director loans that funded the deposit. That predictability is why the specialist buy-to-let market has standardised around SPV lending, and why a company registered as an SPV is usually easier to place than an existing trading company that also wants to hold property.
The practical test a lender applies is: does this company do anything other than own and let property? If the answer is no, and the SIC code confirms it, the company qualifies as an SPV for lending purposes.
The SIC codes lenders accept
The Standard Industrial Classification (SIC) code you register at Companies House tells the lender at a glance what the company is for. Four codes matter for property, and lenders treat them differently:
- 68209 (other letting and operating of own or leased real estate): the primary, most widely accepted code for a buy-to-let SPV. If you register only one code, this is the one.
- 68201 (renting and operating of Housing Association real estate): accepted by most SPV lenders.
- 68320 (management of real estate on a fee or contract basis): accepted, though it describes managing others' property rather than owning your own, so it is rarely the right sole code for an investor.
- 68100 (buying and selling of own real estate): read by lenders as a trading or developing activity, not investment. Several buy-to-let lenders will decline a company that carries 68100 as its only code, because it signals a flip-and-sell business rather than a hold-and-let one.
The condensed SIC list is published by Companies House on gov.uk. A pure buy-to-let SPV normally lists 68209 as its primary code; a company that will both hold and develop may list 68209 and 68100 together. Getting this wrong is one of the most common reasons a case is declined at the decision-in-principle stage, before valuation, and it is a free fix. We cover the mechanics of choosing and, if needed, correcting a code in the dedicated SIC code for an SPV property company guide.
Newly-formed versus trading-company lending
The single most useful thing to understand about SPV mortgages is that a company incorporated this week, with no accounts, no trading history and no track record, can still borrow. Most SPV buy-to-let lenders expect exactly that, because the whole point of a single-purpose vehicle is that it is new and clean.
The underwriting does not look for company profits, because there are none yet. It looks at four things: the property valuation, the rental income measured against the interest coverage ratio (below), the deposit, and the director's personal guarantee and personal credit profile. A day-old SPV with a sound property and a solid director behind it is, in lending terms, a stronger case than an older company with a mixed history, because there are no legacy liabilities to assess.
Where "no income" becomes a specific criteria question is when the director also has little or no personal earned income. Many SPV lenders impose no minimum director income at all; a subset still ask for around £25,000. That distinction, no-minimum-income lending to a newly-formed SPV, is covered in full in SPV mortgages with no income and a newly-formed company.
Worked example: a day-old SPV buying a £180,000 flat
A landlord incorporates a clean SPV (SIC 68209, no trading, no debt) and applies immediately to buy a £180,000 flat that will rent at £950 a month. Here is how a lender sizes the loan.
| Item | Figure |
|---|---|
| Purchase price | £180,000 |
| Deposit (25%, funded as a director's loan) | £45,000 |
| Loan at 75% loan-to-value | £135,000 |
| Stress rate (typical, verify at application) | 5.5% |
| Stressed annual interest (£135,000 × 5.5%) | £7,425 |
| Stressed monthly interest | £618.75 |
| Interest coverage ratio (company / SPV) | 125% |
| Monthly rent the lender needs to see | circa £773 |
| Actual monthly rent | £950 |
| Outcome | Clears, with headroom of circa £177/mo |
The company is days old and files no accounts, yet the case passes, because the lender is underwriting the property and the ICR, plus a personal guarantee from the director, not the company's trading history. The interest coverage ratio of 125% and the circa 5.5% stress rate are the standard limited-company buy-to-let assumptions drawn from the Prudential Regulation Authority's supervisory statement SS13/16; both are lender-specific and worth checking at the time you apply. You can model your own numbers with the rental stress-test (ICR) calculator and the buy-to-let mortgage calculator.
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Personal guarantees, directors and shareholders
Because a clean SPV has no assets or history beyond the property it is buying, lenders secure the loan with a personal guarantee (PG) from the people behind the company. A personal guarantee is a promise by an individual to cover the debt personally if the company defaults and the sale of the property does not clear the balance. It is what allows a lender to advance money to a company that could otherwise walk away leaving only the property as security.
In practice, expect the following:
- Every director usually gives a personal guarantee. Significant shareholders (often those holding 20% or 25% and above) are frequently asked to guarantee too.
- Some lenders cap the guarantee at a percentage of the loan (for example 125% of the advance, to cover shortfall and costs) rather than making it open-ended.
- The guarantors' personal credit files, and sometimes their personal assets and income, are assessed, even though the company is the borrower.
- Lenders prefer a simple standalone SPV owned directly by individuals. Corporate shareholders, a holding-company parent or an overseas owner narrow the panel because the guarantee and the group liabilities become harder to assess.
None of this is a downside so much as the mechanism that makes lending to a brand-new company possible. The people significance of an SPV, its directors and persons with significant control, is recorded at Companies House, and lenders will expect that record to be clean and to match the guarantors.
SPV mortgage rates and loan-to-value versus personal
SPV borrowers sometimes pay a small rate premium over personal buy-to-let, though the gap has narrowed sharply as limited-company lending has moved into the mainstream, and several lenders now price company and personal cases within a whisker of each other at the same loan-to-value. The market norm for both is 75% loan-to-value (a 25% deposit), with up to 80% available at higher rates.
The offsetting advantage sits in the interest coverage ratio. Lenders apply a 125% ICR to limited-company and SPV borrowers, but a 145% ICR to higher-rate and additional-rate individual borrowers, because a personal higher-rate landlord only gets partial tax relief on mortgage interest under Section 24 (see the tax note below). The lower ICR means an SPV can often support a larger loan against the same rent than a higher-rate individual could. That single mechanic, not the headline rate, is frequently the deciding factor. For how rates are set and what actually drives them, see our guide to what drives buy-to-let mortgage rates. Rates move constantly, so treat any number here as indicative and verify the live market when you apply.
How SPV lending fits the tax decision (Section 24)
SPV buy-to-let lending exists at the scale it does because of tax, specifically the Section 24 finance-cost restriction. Individual landlords no longer deduct mortgage interest from rental profit; instead they receive only a 20% basic-rate tax credit (the mechanism set out in HMRC's Property Income Manual at PIM2054), which erodes the return for higher-rate taxpayers. A company, by contrast, deducts finance costs in full against its profits before corporation tax. That difference is the main reason landlords incorporate and the main reason SPV mortgages are in demand.
This is a tax point, and we do not re-argue it here. The full working is in our Section 24 tax relief complete guide, and the incorporate-or-not decision, including corporation tax, dividend extraction (dividend rates for 2026/27 are 10.75%, 35.75% and 39.35%) and the stamp duty cost of transferring existing property, is set out in the limited company versus personal ownership comparison. Do the tax decision first; the SPV mortgage is the funding mechanism that follows from it, not the reason to incorporate.
Setting up an SPV lenders will accept
To be lender-ready, keep the company simple:
- Incorporate a private limited company at Companies House with SIC 68209 as the primary code for a pure buy-to-let SPV.
- Keep the activity confined to holding and letting property. Do not bolt on unrelated trade.
- Appoint the directors and shareholders who will give the personal guarantees, and keep the ownership standalone rather than under a holding company unless you have confirmed lender acceptance.
- Set a registered office and record the persons with significant control accurately.
- Fund the deposit as a director's loan to the company where appropriate, so it can be repaid tax-efficiently later (a structuring point to plan before you incorporate).
The company can be days old when it applies. What it cannot be is a general trading company with a property tacked on, or a company whose only SIC code reads as a trading or development business.
One boundary to be clear about. An SPV mortgage is unregulated business lending because a company is borrowing for a business purpose and a company cannot occupy a property as a home. Business buy-to-let of this kind sits outside the regulated-mortgage perimeter defined in article 60C of the Regulated Activities Order 2001 and explained in the FCA's PERG 4.10A guidance. Any introduction we make is a simple, business-purpose one that stays inside the financial-promotion rules in section 21 of FSMA 2000, not a recommendation of a specific product. If a company were ever used to buy a property for a director or a relative to live in, that would raise regulated-mortgage and prohibited-purpose issues that fall outside this territory entirely. That is not something we introduce; a reader in that position should speak to an FCA-authorised mortgage adviser. Everything on this page assumes a genuine investment let to an unconnected tenant.
SPV lending is well established, and a clean single-purpose company with the right SIC code, a sensible deposit and a director willing to give a guarantee is a straightforward case even on day one. The harder decisions are the tax ones that sit around it, which is where planning the structure before you incorporate pays off.