heavy refurb for uninhabitable property, KT24
Client circumstances:
Clients had purchased a residential investment property and had recently been granted planning permission to demolish the property and build an extended two-storey dwelling to increase its square footage. They had started the works using their own funds but when it came to raising further funds, they were unable to get a buy-to-let mortgage as the property was now deemed uninhabitable.
The clients quickly needed an additional £394,000 to complete the works and redeem their first charge lender. As time was of the essence, their broker contacted us straight away.
MT Finance solution:
We provided a £394,000 heavy refurb bridging loan at 51% LTV of the asset’s £780,000 open market value, and at the same time redeemed the client’s first charge loan. Interest was retained at 0.85%, over a 12-month term. There are no exit fees or early repayment charges.
We also agreed a further drawdown of £200,000 to assist in the build once the property’s value increased.
The benefits:
By taking out our heavy refurb bridging loan, the clients were able to continue with the conversion which once works were complete, expected to fetch a GDV of £1.5 million. They will then be able to refinance out of our bridging loan with a traditional buy-to-let mortgage, against the property’s higher value and enjoy a high-income generating property in their portfolio.
