2026 rate landscape
Indicative pricing across the UK SPV BTL market in 2026 (vanilla 2-bed flat, clean credit, experienced landlord):
- 75% LTV 5-year fix: 5.40%–5.95%
- 75% LTV 2-year fix: 5.60%–6.20%
- 80% LTV 5-year fix: 5.85%–6.40%
- 85% LTV 5-year fix: 6.40%–7.00% (specialist only)
- Tracker (75% LTV): BoE + 2.10%–2.60%
Arrangement fees on SPV BTL products are typically 1.5%–3% of the loan, occasionally 5% on the sharpest headline rates. Use total-cost calculations over the fixed-rate term to compare like-for-like.
SPV vs personal name: the tax driver
Worked example: a higher-rate taxpayer with a £180,000 BTL mortgage at 5.5% (£9,900 annual interest) and £15,600 annual rent.
Personal name (Section 24)
- Profit before mortgage interest: £15,600 − £1,500 (other costs) = £14,100
- Taxable profit: £14,100 (interest not deductible)
- Tax at 40%: £5,640
- Less 20% mortgage interest credit: £9,900 × 20% = £1,980
- Net tax: £3,660
- After-tax cash: £14,100 − £9,900 − £3,660 = £540
SPV (limited company)
- Profit after mortgage interest: £14,100 − £9,900 = £4,200
- Corporation tax at 19%–25%: £798–£1,050
- Net company profit: £3,150–£3,402
The SPV retains 6× more cash for reinvestment. Dividend tax on extraction is a separate consideration — money kept in the company to acquire more stock compounds materially faster.
Lender-by-lender SPV pricing competitiveness
- Paragon: Sharp on portfolio landlords (4+ properties); strong on HMO and MUFB.
- Foundation Home Loans: Competitive on first-time landlord SPVs; flexible on director income.
- Landbay: Automated underwriting; sharp on standard SPV cases; portfolio-friendly.
- Kent Reliance: Broad appetite — HMO, MUFB, expat, first-time landlord SPV.
- The Mortgage Works (TMW): Strong SPV range for both vanilla and HMO; Nationwide-owned reliability.
- Aldermore: Solid SPV BTL range; portfolio underwriting.
- Precise: Adverse-credit-friendly SPV BTL specialist.
- Fleet Mortgages: Sharp on HMO, MUFB and limited company.
- Molo: Digital-first SPV BTL; fast decisions.
- Castle Trust: Specialist on complex SPV (multi-director, complex ownership).
SPV setup essentials
- Incorporate at Companies House (£50, 24 hours online).
- Use a SIC code restricted to letting: 68209 (other letting), 68100 (buying/selling own real estate) or 68320 (management of real estate on a fee basis).
- Set up a business bank account — Lloyds, NatWest, HSBC, Starling, Tide all serve SPVs.
- Appoint an accountant familiar with property SPVs.
- Apply for the BTL mortgage in the SPV name — directors personally guarantee.
ICR (Interest Coverage Ratio) at SPV pricing
Limited companies generally enjoy basic-rate ICR treatment: rent must cover 125% of mortgage interest stressed at 5.5%. Worked example: SPV BTL at 75% LTV on a £250,000 property → £187,500 mortgage. Stressed interest at 5.5%: £10,313 annual / £859 monthly. 125% ICR rent needed: £1,074. If actual rent is £1,200, passes comfortably.
Director income, age and credit
- Minimum director income: usually £25,000–£30,000 personal income required. A handful of lenders (Foundation, Landbay) accept lower or no minimum.
- Director age: mortgage typically to age 75–80 at term end.
- Director credit: clean credit preferred. Specialist lenders (Precise, Vida) take adverse on director.
Pros
- Mortgage interest fully deductible against company profits.
- Strong long-term portfolio scalability via retained profits.
- Wider lender pool than 2017 — sharp competition.
- SPV structure is fast and cheap to set up.
- Better for higher-rate taxpayers and portfolio landlords.
Cons
- Rate premium of 0.10%–0.30% over personal-name BTL.
- Director personal guarantees required on virtually all SPV BTL loans.
- Annual filing costs (£500–£1,500 accountancy) eat into low-yield deals.
- Extracting profit via dividends incurs personal dividend tax.
- Existing personal-name properties can't be moved to an SPV without triggering SDLT and CGT.