Client circumstances:
Our clients had recently purchased a former community hall which they had started to convert into a three-bedroom home for themselves. This was the second property they were renovating and their first had been sold for a substantial uplift, allowing them to utilise the equity for the outright purchase of the community hall and the initial works. Planning permission had been granted and works had begun but they were now in need of further funds to complete the project. Unable to secure high street finance due to the property’s change of purpose and keen to ensure the works were not interrupted, their broker contacted our regulated team.
MT Finance solution:
Working closely with the valuer and solicitor, we issued a heavy refurb regulated bridging loan of £143,000 at 50.26% of the property OMV of £284,500. The term was at 12 months. This will give the clients plenty of time to complete the remaining works which are estimated to take between four to five months. As the works continue, the market value of the property will increase with the valuer predicting it to have a GDV of £446,000 once the renovation is complete.
The benefits:
Our regulated bridging loan ensured that the clients have the funds they need to convert the community hall into their new three-bedroom home without facing any delays. As the works are expected to significantly increase the property’s value, this will make it much more attractive to high street lenders once finished. The clients will then be able to refinance out of our bridging loan with a traditional mortgage based on the property’s higher value. As with all our bridging loans, the clients will not face any ERCs or exit fees if they repay their loan early.