Holiday let purchase for commercial and personal use

What was the situation?

After recently completing on a cash purchase of a large residential asset in Surrey worth £2.6 million, I was approached by an experienced property developer who needed finance to fund the initial stages of a development project in South West London. In total, the client needed to secure a large loan of £1.7 million to progress the project.

What was the issue?

The challenge with this transaction was that the client needed to draw down on the funds within three weeks of enquiry. As well as this, the asset was outside of prime central London, albeit in South West London, which meant the development’s location fell outside of favour with many lenders.

Finally, as the property had just been purchased – literally in the few weeks preceding my client’s finance application – the land registry had not yet been updated to show my client as the proprietor, making it much more difficult for the lender to place their charge on completion.

What was the process?

It was clear from the start of this case that my client needed a finance option quick enough to meet the three-week deadline as well as being able to cater to the challenge presented by the land registry having not been fully updated.

After exploring several different avenues of finance, I decided a bridging loan was the best course of action for my client to take due to the fast, efficient nature of a bridge. As the loan will be repaid within a few months from completion, I focused on sourcing options that carried a discount for the first part of the loan.

What was the solution?

Working at a pace and leveraging my vast network of development funding lenders, I was able to secure a bridging product that carried an initial interest rate of 0.49% at 72% loan to value (LTV). The latter technically fell outside of the stated criteria; however, I was able to negotiate and secure this set of terms due to my close working relationship with the lender.

Once the finance was confirmed, I worked at lightning speed with the lender and both sets of solicitors to ensure completion was met by the deadline to the delight of my client.