Have you seen our latest video breaking down buy-to-let finance for limited companies? Here is Karl outlining what it is and how it works. For more information about this offering, visit our Buy-to-let for limited companies page.
Here is a quick overview of the content:
Buy-to-let for limited companies refers to when a property is bought in a company name. This company will be a business that has been set up solely to hold property. It is very similar to a personal buy-to-let, but the entity that owns the property is a limited company, rather than an individual. This means that we would look into the shareholders of the company to see that they have the appropriate experience, know-how, and credit to take on a buy-to-let mortgage.
A limited company does not necessarily have a credit score, but it will be searched at Companies House, and information about the company will show up on that, which can include accounting history. This data can also include any adverse information or anything that is registered in the company name. On top of this, we would still do a personal search against the shareholders.
On a limited company buy-to-let, we will look at the shareholders and the directors of the company that wants to purchase the company. The shareholders are the people that own the company, and the directors are the ones who control the company on a day-to-day basis.
To obtain a buy-to-let mortgage, whether it is in a personal name or as a limited company, we would still look at the individuals concerned. Overall, lenders do lend to limited companies. The main difference is that you need to seek an accountant’s advice on how it can affect your personal income, and that will be the main deciding factor of whether to take a mortgage in a personal name or through a limited company.