What Does SPV Mean In UK Property Investment?
The acronym ‘SPV’ is an abbreviation of the phrase “Special Purpose Vehicle”. In the world of property investment and property finance/mortgages, it is referring to a limited company set up specifically for property investment.
The limited company cannot carry out any other types of “trading” now or in the past. Its sole purpose must be to hold property investments. Even certain types of property business may be considered trading, such as serviced accommodation, estate/letting agents or property construction and development.
It is possible to take out a BTL Mortgage or Bridging Loan with a brand new SPV limited company. In fact some mortgage products specifically require the company to be an SPV.
How To Set Up A SPV For Property Investment?
It’s possible to set up a new limited company as a SPV yourself or by using a professional, such as an accountant.
It really is just as simple as heading over to Companies House and registering a new ltd company with the correct SIC (Standard Industrial Classification) code. It costs about £12.
If you don’t feel confident doing it yourself, then a professional such as an accountant will usually help (for a fee of course).
What SIC Codes Should I Use For A New SPV?
The SIC codes related to property investment are:
68100: Buying and Selling of own Real Estate
68209: Letting and Operating of own or leased Real Estate.
What Is An SPV Mortgage?
When buying a buy to let property with a mortgage, you may decide to do this within a limited company. Many buy to let mortgage lenders require the limited company to be an “SPV” which stands for Special Purpose Vehicle”. This simply means that the limited company is used purely for property investment and not for any other business trading activities, property related or not.
What is a SPV ltd company?
‘SPV’ is an abbreviation and it means a “Special Purpose Vehicle”. An SPV Ltd company is when you set up a limited company for one specific purpose, usually for the purpose of property investing. This means the company cannot now or in the past have any other trading activities within it. It is to be used purely for investing and usually requires the correct SIC code when setting it up. For Property investment this would be 68100: Buying and Selling of own Real Estate and/or 68209: Letting and Operating of own or leased Real Estate.
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