70% LTV bridging loan secured for investment property in need of refurbishment

What was the situation?

We were recently approached by a UK national client who was looking to purchase a historic semi-commercial property in Penzance, Cornwall, that required internal modernisation and refurbishment.

The client had previous experience in interior design, refurbishment and the selling of old properties and intended to add a side extension to the main investment property and convert the extension into a small shop space.

For our client to complete this purchase and fund the necessary refurbishment works, she required a bridging loan and needed to borrow 70% loan to value (LTV) in the face of several structural issues and a slight down valuation.

What was the issue?

There were a few hurdles we had to overcome in this case. Firstly, due to the property’s coastal location, it had suffered considerable internal dampness.

Secondly, the vendor was also very keen to make a quick sale and so time was of the essence, meaning we needed to move quickly.

Thirdly, to appease any lender concerns surrounding suitable levels of security, additional surveys had to be carried out. These surveys included a flood risk report, a timber report (due to a nearby tree), a radon gas report, a mining report and a property structural report (due to slight foundation movement).

Finally, the property had also suffered from a slight down valuation, meaning the term had to be shortened slightly to increase the net loan to the required amount without jeopardising the overall deal.

What was the process?

Throughout the process, an in depth level of lender knowledge played a crucial part in this deal. Not only do many lenders not accept a semi-commercial property without change of use, but it is also rare for lenders to allow structural works to take place during the loan term. However, using our combined skill set, we were able to provide our client with competitive, market-leading terms, working with a suitable lender who happily accepted the property and its quirks in a speedy manner.

We leaned into our strong and reliable lender network to successfully negotiate on unregulated bridging loan rates and strike off certain requirements which were vital in getting the deal across the line. Making sure to go above and beyond for our client, we saw the deal through from start to finish by efficiently assisting the client book, ensuring we promptly carried out every necessary additional survey and kept the vendor updated and happy throughout the entire process.

What was the solution?

After working closely with the lender, we secured a bespoke, fully-retained 70% LTV unregulated bridging loan on a nine-month term on this semi-commercial property, at a rate of 0.89% per month. This maximised day one borrowing and granted our client enough time to complete the necessary refurbishments on her new property and eventually refinance on the backend as well.

The client was thrilled as she was able to purchase her ideal future investment property quickly and is currently carrying out the works. We have also already lined up a refinance option, in place for when the property is ready to rent out. The area is difficult for outside investors to purchase assets easily, so this ensured everything was done quickly and easily.

Despite having to complete additional requirements to get the deal across the line, our client was so grateful that LDN Finance made her purchase possible, after having previous negative experiences with other brokers prior to getting in contact with our specialist team.

Lending solutions with LDN Finance

Have you found an investment property that just needs a little TLC to reach its full potential? Perhaps an unregulated bridging loan is the answer for you.

At LDN Finance, our specialist team has a plethora of experience in securing short-term finance solutions suited to your circumstances – no matter the complexity. Working closely with our trusted network of private banks and specialist lenders, we’re sure to secure a bespoke arrangement for your project at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.