Short-Term Funding for Property Renovations and Conversions

Case study – £543K loan for investment property:

Scenario: An applicant was looking to leverage the equity of one of his investment properties in order to purchase another. However, it transpired that there was not enough equity for a second charge bridging loan to facilitate the purchase.

Solution: After reviewing the case carefully, a bridging loan was arranged of £543,000 on a 1st charge basis over six months which allowed the applicant to borrow the full amount required and to complete the purchase. They would then refinance to a longer term loan to exit the bridge after six months.

Bridging finance can be used to purchase or refinance residential and mixed use property requiring refurbishment.

Property needing repairs and refurbishment before they can be let to tenants can be purchased using bridging finance for a short term turnaround completing the refurbishment in a short space of time to maximise capital gain and rental value.

Bridging finance can be utilised to purchase, or refinance, uninhabitable property needing repairs or refurbishment. It is suitable for most residential property requiring renovation. Improvements to the property might be installing a new kitchen or bathroom and non-structural changes to the layout. Improvements may be necessary to make the property habitable for home buyers purchasing with a mortgage.