More landlords now buy rental property through a limited company than in their own name, and the reason is mostly tax. Since mortgage interest stopped being fully deductible for individual higher-rate landlords, holding property in a company, where interest is still an allowable cost, has become the default for many. It is not automatically better, and the mortgage works differently, so it is worth knowing what a lender actually looks at.
The company has to be the right shape
Lenders want a simple, property-only company, usually a special purpose vehicle set up just to hold property, with the right SIC codes. A trading company with other activities is harder to place. If you are setting one up to buy, get the structure right first, because changing it later means fresh applications and cost.
Rent still does most of the work
As with any buy-to-let, the loan size turns on the rent, not your salary. Lenders apply an interest coverage test, checking the rent covers the mortgage payment by a margin, often stress-tested at a higher rate than you will actually pay. Company buy-to-let is sometimes assessed a little more generously than higher-rate personal lending, which is part of the appeal, but the test still governs how much you can borrow.
Personal guarantees are normal
A company has limited liability, but a buy-to-let lender will almost always want a personal guarantee from the directors. In practice that means the protection of the company structure does not extend to walking away from the mortgage. Read what you are signing, because the guarantee is real.
The company changes the tax treatment and the paperwork. It does not change the fact that the rent has to stack up.
Fewer lenders, so advice matters more
Not every lender offers company buy-to-let, and rates and fees vary more than in the mainstream residential market. Criteria on portfolio size, houses in multiple occupation and how surplus income is treated differ from one lender to the next. This is a corner of the market where searching broadly, rather than going straight to your own bank, tends to change the answer.
Whether a company is right for you is a tax question for your accountant as much as a mortgage question for us, and we are not tax advisers. What we can do is find the lender and the terms that fit the structure once you have decided on it.