Limited Company criteria

Key criteria

To qualify for a Limited Company mortgage with us the company has to be set up with the sole purpose of buying, letting and selling properties. These are known as Special Purpose Vehicles (SPVs).

• Only SPVs with one or more of the following Standard Industrial Classification (SIC) codes are considered:
  • 68100, 68201, 68209, 68320
  • To find which SIC codes are associated with a company you can search here
• Partnerships or LLPs aren’t accepted
• Companies must be registered in England, Wales or Scotland. SPVs are considered from day one of being set up.
• A floating charge over assets of the company isn't required
• SPVs that have associated commercial property/assets are not accepted.
• Personal guarantees are required from all directors in all cases.
• The account from which the Direct Debit payment is made must match the Limited Company name.

Please be aware that all guarantors will need to obtain Independent Legal Advice prior to completing the Deed of Guarantee.

Purchase of Directors main residence

• We'll consider applications where a Limited Company is purchasing a main residence from one of its Directors/Shareholders to use as a BTL. This is subject to:
• a simultaneous onward purchase of a new residential property (with another lender), address to be supplied on application and confirmed by the acting solicitor prior to completion.
• the Director/Shareholder leaving the residential address the Limited Company is purchasing upon completion – and providing us with a new correspondence address (if required)
• providing a copy of the onward residential mortgage offer prior to completion (if applicable).
• A Limited Company purchase product must be selected

Company structure

• Companies must be a SPV; company structures outside of this aren’t acceptable
• The maximum number of directors/shareholders is two and they must be the same people.
  • Directors/Shareholders on a The Mortgage Works application must match records at Companies House
• All shareholders must be directors and own 100% shareholding in the limited company between them.
• We’ll accept two directors where only one is a shareholder, providing they hold 100% shareholding.
• Directors may only have one limited company financed to The Mortgage Works
• The Company must advise us of any proposed changes in the directors of the Company or shareholding. If your client fails to comply, this may lead to legal action against them.
• Directors must meet our standard lending criteria.
• Make sure to input the Company/Person with Significant Control (PSC) Director details correctly, as we're legally obliged to tell Companies House if there’s a discrepancy between beneficial owner details and the information on the people with significant control (PSC) register.

Portfolio landlords

• Portfolio landlord criteria applies if the company and its directors own four or more mortgaged properties, either separately or altogether.

Source of deposit

Gifts

• A gifted deposit from individuals to director(s) are acceptable, however gifts to the company are not.
• We'll accept a gift of equity if the property is already owned by the director(s) and is being purchased by their Limited Company. Please note these applications must be submitted as a purchase.
• Non-UK gifts and funds from non-UK companies or trusts are not accepted. If directors of the SPV have funds overseas, these can be considered subject to an audit trail.

Intercompany loans

We'll accept an intercompany loan as a source of deposit, subject to:

• the company structure mirroring across the SPV and the connected company (directors/shareholders must match). It must be a UK to UK company (no offshore companies).
• the donor company must have been trading for a minimum of 12 months and must have accounts filed that reflect the donor company actively trading. It's unacceptable for only dormant accounts to have been filed.

When applying, the following evidence must be provided:

• Loan Agreement
• The loan is repayable,
• A term has been agreed (not exceeding the term of the mortgage)
• The rate of interest due is at least HMRC’s ‘Actual Official Rate’
• The monthly payment or interest payments are being rolled up.
• Where there's a monthly loan repayment, we'll deduct this from the rent and the surplus used for affordability purposes in the ICR calculation.
• Where the interest payments are being rolled up, this will not affect affordability.
• There is no interest or charge over the security.
• Donor company bank statements
• One month of bank statements, dated within the previous three months. If the loan has been sent to the SPV, we'll require a full month of transaction history prior to the transfer.
• SPV company bank statements
• Three months’ worth of statements from the borrowing SPV.

We won't assess the application until you have submitted all required evidence.

Bounce back loans

• We don’t accept Business Bounce Back Loan as deposit.

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How to apply

You can apply for Limited Company products through TMW Online.

You can't obtain a Decision in Principle (DIP) through TMW Online. Mortgage Illustrations should be obtained from your usual sourcing system.

TMW Online is updated every 10 minutes, so you can get an up-to-date case update online.

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Product and loan criteria

• Products available up to 80% LTV
• Maximum loan amounts will depend on the application, please see our Maximum loan per property table for more detail
• Buy to Let products have a maximum loan of £1,500,000
• 125% Interest Cover Ratio (ICR) for Buy to Let
• First Time Landlords (Subject to standard criteria) are accepted.

Download our product guide to view our product range and information, including stress rates.

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Underwriting requirements

Our specialist underwriting team will confirm the case requirements when your client’s application is submitted. In most cases, we’ll request:

• Proof of deposit (purchase applications)
• Property schedule (Please note: where a property schedule is required, the application will not be reviewed by an Underwriter until it is received)
• 3 months' personal bank statements for all directors.

If you haven't met with the directors 'face to face' then you'll be required to certify documents used to support your client's application.

If we're unable to verify your client electronically, we'll ask you to provide the Certificate of Incorporation.

We reserve the right to request additional information to satisfy requirements.

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Company restrictions

If your client is planning to make changes to the directors or shareholding of their company, they must let us know directly in advance.

If the company changes have already been made, your client will need to re-instate the structure we originally agreed to, or redeem their mortgage.

You must apply for our consent to make any company changes. All applications are subject to a risk assessment.

Please complete and ask your client to sign our Change of Director/Shareholder form. You can then post the completed form, along with the required identification to:

The Mortgage Works
Northampton Administration Centre
Kings Park Road
Moulton Park
Northampton, NN3 6NW 

If we approve your request, you will need to pay a ‘change of parties fee’. See Our fees and charges for details.

Unacceptable company changes

We won't accept the following changes:

• Conversion of the company to a Charity, Trust or Foundation.
• Restructuring the company so it becomes part of a layered company, including subsidiaries, parent and sister companies.
• Having any links to offshore companies, including the Channel Islands and Isle of Man.
• Addition of directors or shareholders under the age of 21.
• Having more than two directors/shareholders in the company. The maximum number of directors/shareholders is two and they must be the same people.

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Useful guides and forms

If you need a suitable PDF reader, we recommend Adobe Acrobat.

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Additional information

• For new applications, we'll be paying an additional 0.10% gross procuration fee for Limited Company cases. This will be payable via your usual Mortgage Club or Network.
• If your clients are both directors of the company however only one has a shareholding, then 100% of the shareholding must be owned by the directors to be acceptable to The Mortgage Works.
• We aren’t insisting on separate solicitor representation for you and your client.
• We'll accept an SPV Limited Company which is set up solely for the purpose of buying, letting and selling residential BTL property. If the Limited Company trades in additional industries, this is not acceptable.
• The SIC code of a company confirms the nature of trading. The Mortgage Works will accept any/all of the SIC codes 68100, 68201, 68209 and 68320.
• We won't accept Layered companies. A layered company is where another company has a shareholding in the proposed company, or where the proposed company has a shareholding in another company.
• We'll require first legal charge over the security.

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