On this article, I will look at incorporating Limited Company to enable a Special Purpose Vehicle (SPV) to purchase Buy to Let (BTL) properties.
HMO / Multi-Block properties can also be added to the limited company.
As mortgage brokers, we have had many enquiries about SPV mortgages but some clients were confused about the process of forming the company.
The first difference to understand is between a limited company which has a very wide area of authority to trade compared to a Special Purpose Vehicle (SPV).
An SPV is a limited company which has been established by private individual(s) for the sole purpose of BTL activities i.e. the purchase/remortgage of residential properties for letting.
The company must be incorporated specifying the appropriate SIC codes.
- 68100 Buying and selling of own real estate
- 68209 Other letting and operating of own or leased real estate
- 68320 Management of real estate on a fee or contract basis
You have 3 options
- Complete a registration with Companies House
- Instruct your Accountant to arrange. (we can recommend an accountant if required)
- Employ an agency. A popular choice for landlords is Companies Made Simple.
I recommend the Privacy Package costing £49.99 plus vat. This option will keep your residential address private
Companies Made Simple will not understand the term Special Purpose Vehicle as it a mortgage industry term.
Other areas to consider
You need to appoint a minimum of one Director.
Additional Directors and/or a Company Secretary can also be added.
Each shareholder should be allocated a percentage share of the company.
Any shareholder with a holding greater than 25% is a Person with Significant Control(PSC). Each PSC’s name month and year of birth, nationality and service address will appear on the public register.
You will need to set up a business bank account. (HSBC are slow)
Why Use Neil Soundy Financial Services For Your Mortgage Advice?
- We are experts in SPV / Ltd Co lending.
- Your initial consultation is free with no obligation
What Our Clients Say
What you see is what you get with Neil Soundy FS! Very professional, very experienced and always on time. Securing mortgages on 2 properties simultaneously using SPV was unbelievable and amazing. We would always recommend Jake, a man that knows his onions, very brilliant at his job!
F Babarinde
How Much Will It Cost Me For Your Advice?
A fee of £495 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.
Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.
The Financial Conduct Authority does not regulate some forms of buy-to-lets.
We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.
Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.
