What is an SPV?
A Special Purpose Vehicle (SPV) is a limited company that mortgage lenders accept for buy-to-let mortgages.
The companies (SPVs) are set up to hold property and nothing else. Lenders often prefer SPVs to trading limited companies because they are quicker and easier to underwrite as they come with less baggage.
How do I set up an SPV?
Setting up an SPV is a fairly quick and simple process, and involves either buying it online or through an accountant. The set up cost is £12 and it only takes a few hours to complete the registration with Companies House.
If you already have company that has a SIC code for letting property, and no other revenue other than letting property, then you meet the SPV criteria.
What’s the difference between an SPV and a trading limited company?
Just like normal trading limited companies, you can withdraw income and dividends from an SPV, and profits retained within the company can be reinvested to expand your property portfolio.
If you receive income from other business or assets, lenders are unlikely to lend to limited companies as the inclusion of other income streams present risk to the lender.
There are still lenders out there that will lend to trading companies, so it’s always a good idea to speak to one of our expert advisers to discuss your options.