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Yes, you can use a limited company to get a mortgage for a House in Multiple Occupation (HMO), and for many landlords, it’s the preferred route. This guide explains how HMO mortgages work when buying through a limited company, including the pros and cons, and how they compare to applying in your personal name.
Why Use a Limited Company for a HMO?
More landlords are choosing to purchase HMOs through Special Purpose Vehicles (SPVs) – limited companies set up specifically to hold property investments. The main reasons are:
- Tax efficiency – Rental income is taxed at the corporation tax rate (currently ranging from 19% to 25% for 2024/25) rather than higher personal income tax rates of 40% or 45%. For a higher-rate taxpayer, this can result in significant savings on rental income.
- Profit retention – You can reinvest profits within the company more flexibly, building your portfolio faster without triggering immediate personal tax liabilities.
- Inheritance planning – Company shares are easier to pass on than personally held properties, offering more flexible estate planning options.
However, using a limited company does come with additional considerations:
- Setup and running costs – You’ll need to pay for company formation, annual accounts, and Corporation Tax returns
- More complex administration – Ongoing compliance with Companies House and HMRC requirements
- Accessing funds – Taking money out of the company (via salary or dividends) triggers additional tax.
Do HMO Lenders Accept Limited Companies?
Yes. Most specialist lenders, and even some mainstream providers, offer HMO mortgages to limited companies, particularly SPVs. In fact, certain lenders only work with company structures.
They typically require:
- An SPV limited company with appropriate SIC codes (e.g. 68100 – Buying and selling of own property, or 68209 – Other letting and operating of owned or leased property)
- Trading Ltd companies can also be acceptable but the number of available lender is less that with a SPV Ltd company
- Personal guarantees from directors/shareholders
- Evidence of landlord experience (usually at least one year of buy-to-let or HMO expertise). There are a few lenders that require no landlord experience, but the number of lenders available is limited
For a full breakdown of lender criteria, see our HMO Mortgage Advice section.
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How Is the Process Different from a Personal Name Application?
When applying in your own name, lenders tend to focus more on your individual income and credit profile. You may also have access to a broader range of lenders, including high-street banks. The tax treatment is simpler upfront, but less favourable for higher-rate taxpayers; you’ll pay income tax at 40-45% on rental profits rather than the 25% corporation tax rate.
Using a limited company shifts the assessment toward the company’s structure and the experience of its directors. The lender pool becomes more specialised, with fewer high-street options but strong support from specialist buy-to-let providers. Most lenders will require personal guarantees and more detailed underwriting of the company structure.
The setup is more complex; you’ll need to form the company, set up business banking, and maintain proper accounting records. However, the tax and reinvestment flexibility is often greater, particularly if you’re planning to build a portfolio. Profits can be retained and reinvested without immediate personal tax consequences, accelerating portfolio growth.
Can You Remortgage a HMO in a Limited Company?
Yes, you can remortgage an HMO that’s held in a limited company, either to raise capital or move to a better rate. You’ll typically need:
- Good tenant rental history (usually 6-12 months of consistent occupancy)
- Strong financials in the company
- Up-to-date accounts filed with Companies House
- Continued personal guarantees from directors
If you’re unsure whether remortgaging through your company is the right choice, our team can help. Start here: HMO Mortgage Advice.
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Final Thoughts
Using a limited company to get an HMO mortgage can offer significant long-term benefits, particularly for higher-rate taxpayers and portfolio landlords looking to scale their investments. The tax savings and reinvestment flexibility often outweigh the additional setup and administrative burden.
However, it’s not suitable for everyone. If you’re planning to buy just one or two HMOs, or if you’re a basic-rate taxpayer, holding property in your personal name may be a more straightforward and cost-effective option.
Please note: This guidance reflects tax rules and lending criteria as of 2024/25. Tax legislation and lender requirements change regularly, so always seek up-to-date, personalised advice.
If you’re considering this route or want to explore whether it’s right for your next HMO investment, speak to our experienced brokers or explore our full HMO mortgage guidance page.
