Company buy-to-let in Chichester
Chichester's property prices are high compared with rents, and many local landlords are higher-rate taxpayers. As elsewhere, that can make a limited company worth considering, because many lenders use a lower rent test for companies than for higher-rate personal borrowers.
The city's tenants include university staff and students, hospital staff, people working at Goodwood and the Rolls-Royce factory, and commuters, which supports single lets, professional house shares and student HMOs. Within the city walls, property is often listed and expensive; areas such as Whyke, Parklands and Summersdale offer more family homes and flats, while harbour villages are popular for holiday lets.
Company landlords sometimes hold holiday lets around Chichester Harbour as well as long-term lets. Lenders that lend to companies on holiday lets are a smaller group and look closely at projected income and location. The same licensing and Renters' Rights Act rules apply to companies as to individuals.
Personal name or limited company?
Buying through a limited company is not automatically better. Company landlords can usually offset mortgage interest in full as a business cost and pay corporation tax on profits, but taking money out of the company as salary or dividends is taxed again. The 5% stamp duty surcharge applies to companies too. For higher-rate taxpayers building a portfolio, a company often makes sense; for a basic-rate taxpayer buying one property, personal ownership may be simpler.
Moving properties you already own into a company is treated as a sale, which can trigger capital gains tax and stamp duty. Your accountant should advise on the structure; we then find the limited company buy-to-let mortgage that fits it.
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How limited company buy-to-let lending works
Lenders mainly want to see three things: a suitable company, usually an SPV with property SIC codes such as 68100, 68209 or 68320; directors and shareholders with acceptable credit who will sign personal guarantees; and rent that covers the mortgage by the lender's margin, commonly around 125% at its test rate.
Deposits generally start at 25%. A brand-new company with no accounts is not usually a problem, because the lender looks at the people behind it. Specialist properties, such as HMOs and multi-unit blocks, have their own criteria, which we cover in our SPV and HMO lending guide.
Example: a student house in a company
This is an illustrative example, not a real case. An SPV buys a four-bedroom house near the university and lets it to students on a single joint tenancy. The lender assesses the rent at its company rent test, and the directors give personal guarantees. If the landlord later lets rooms individually to five or more people, the property would need an HMO licence and possibly an HMO mortgage.
Limited company buy-to-let advice in Chichester
Russell Braiden CeMAP and the team arrange company buy-to-let lending across Sussex and Kent. We are directly authorised by the Financial Conduct Authority (FRN 925926) and rated 5.0 stars from 109 Google reviews. We are based in Hastings and most Chichester clients work with us by phone or video, with documents uploaded securely; you are also welcome at our Hastings office.
Our broker fee is £599. For a purchase it is payable when your mortgage offer is issued; for a remortgage to a new lender it is charged on completion. Where there is adverse credit the fee is £999, or up to 1% of the loan. We do not charge a fee for product transfers with your existing lender, and we confirm any fee in writing before we start. Contact us or call 01424 444597 to talk it through.
Frequently asked questions
Can my company buy a holiday let near Chichester Harbour?
Yes, from a smaller group of lenders that lend to companies on holiday lets. They will want projected income from a letting agent and will look at the location and flood risk.
Can a limited company buy a listed property in Chichester?
Yes, from lenders that accept listed buildings. Valuations may take longer and alterations may be restricted.
Will I have to give a personal guarantee?
Almost always. Lenders usually ask each director, and often any shareholder with 20% or more, for a personal guarantee. That means you could be personally liable if the company cannot repay, so take independent legal advice.
Is a limited company buy-to-let mortgage regulated?
No. Mortgages to limited companies are not regulated by the FCA. We still give you the same written recommendation and explain the costs and risks.
Can a brand-new company get a mortgage?
Yes. Many lenders are happy to lend to a newly formed SPV with no accounts, because they assess the directors' income, credit and experience instead.
Important: Limited company buy-to-let mortgages are not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on your mortgage. Directors are usually asked for personal guarantees, which can put personal assets at risk. The FCA does not regulate tax advice, so please take advice from an accountant before buying through a company.
Transparent Mortgage Services is a trading style of Transparent Financial Associates Limited, which is directly authorised and regulated by the Financial Conduct Authority (FRN 925926). 17 Havelock Road, Hastings, East Sussex TN34 1BP. Telephone 01424 444597.
