Three-Property Bridging Finance Delivers Below-Market-Value London Flat Purchase
What was the situation?
Our client, a professional portfolio landlord with a substantial London property portfolio, identified a London flat with an open market value of £325,000 available to purchase at £220,000.
Although the property was being sold outside of auction, the transaction was subject to auction-style conditions requiring completion within 35 days.
With no available capital for a deposit, our client wanted to fund the majority of the purchase and the £12,900 Stamp Duty Land Tax liability using equity already held across the portfolio.
What was the issue?
The transaction was governed by a tight completion deadline. The lender search, underwriting process and legal work all needed to be completed within a narrow timeframe, leaving little room for delay.
Achieving the required funding meant structuring security across three properties: a first charge against the purchase property and second charges against two existing buy-to-let properties within the portfolio. Consent from both existing lenders was required before the second charges could proceed, adding an additional layer of coordination alongside the purchase itself.
Finding a lender whose appetite aligned with the proposed security structure presented its own challenge. The second charge elements were relatively modest in the context of the overall facility, reducing the number of lenders prepared to consider the case despite the strength of the wider security position.
What was the process?
Adam Kassaman, Associate Director – Specialist Finance, structured the transaction around a first charge unregulated bridging loan against the purchase property and second charges against two lower-leveraged buy-to-let properties within the portfolio.
Drawing on his established relationship with the lender’s dedicated underwriting team, Adam arranged AVMs across all three properties, removing the need for formal valuations and significantly reducing the time required to reach offer. In-house legals were agreed for both second charges, meaning our client only needed to instruct solicitors for the purchase itself.
With the deadline approaching, Adam coordinated consent for the second charges directly with the existing lenders while maintaining contact with our client multiple times each day to ensure every aspect of the transaction progressed simultaneously. He also remained in close contact with the selling agents throughout, giving them assurance that completion would be achieved within the required timeframe.
What was the solution?
Adam arranged a £212,000 12-month unregulated bridging loan, structured across three properties through a first charge against the purchase property and second charges against two existing buy-to-let properties.
The maximum loan achievable was set by the values of the two supporting buy-to-let properties, funding the substantial majority of the purchase price and the SDLT liability. AVMs were accepted across all three assets and in-house legals were used for both second charges, minimising both cost and time to completion.
The transaction completed within the auction conditions deadline, enabling our client to complete the acquisition at a significant discount to open market value.
A light refurbishment is now under way, and LDN Finance is coordinating the refinance strategy. By funding the majority of the acquisition through existing portfolio equity, our client preserved capital for future investment opportunities.
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