Bridging Loan Over Two Properties In Southeast England

£530k Kent

Our broker created a bridge loan solution to enable the purchase of an auction property and light refurbishment of a London property to be carried out simultaneously with the help of a flexible lender.

The Scenario

Our client came to us initially looking to finance a property purchase – at auction, for £480k, and with only 56 days to complete. 

He was looking to upsize from his current residence – a property in Kent valued at £580k. Given the timeframe, our client was keen to secure a short-term solution and finance the purchase as quickly as possible. 

Generally, auctions are incredibly competitive markets with highly sought-after properties. Our client's purchase, however, took place online (the Modern Method of Auction), allowing 56 days to complete, rather than the typical 28 days given for a live auction. There would be no deposit put down for this property either. 

In addition to this, the client would also require £20k, used from the bridge facility, to complete some light refurbishments to the additional vacant property that our client owned – a London flat valued at £700k. He had no mortgage on either property and was retired. 

The London flat would need refurbishment to realise its full market potential, and the sale of that flat would facilitate our client’s exit strategy – but, of course, the difficulty would come in finding the right lender to offer flexibility in this matter, as the majority of lenders require that a property is on the market at the point of completion.

The Solution

Our broker secured bridging finance of £530k by way of a 1st charge loan against the two properties. We suggested the best course of action, and the best possible deal, would be a bridge loan with a short-term requirement; no monthly payments and no early repayment fees.

To find a suitable lender to facilitate this, we first approached two different specialist bridging lenders. We have an extensive network of lenders we work with regularly and have access to the entire short-term finance market to help our clients get their cases to an appropriate lender for their unique circumstances.

The lender with the lowest rate, and an option for desktop valuations, was selected – getting our client an LTV (Loan-to-Value) of 45%, with a 0.48% interest rate over a 12-month term. The majority of the facility went towards the purchase of the auction property at £480k, and then, as planned, our client used £20k for the light refurbishment work on the London flat.

Additionally, this lender was flexible and allowed for the required refurbishments on the London flat prior to its sale. Meaning, the property could reach its full market value and have the time needed to find a buyer. 

This case was unique in that bridge finance was secured over two properties, and there was the additional hurdle of one of the properties the loan was to be secured against requiring refurbishment. 

However, we managed to create a bespoke solution for our client; allowing him to upsize into the property bought at auction, with no additional concerns for the financing of such a purchase and all completed within 50 days, within the time frame for the auction property. 

Had the client not come to us, he would not have been able to afford a standard mortgage product and such a lengthy process would have certainly prevented his plans from succeeding.

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