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PROPERTY INVESTOR SECURES BRIDGING FACILITY FOR HEAVY REFURBISHMENT PROJECT

WITH PLANNING PERMISSION YET TO BE AGREED

Objective

Our introducers client is in the process of purchasing a house in London with a current value of £800k.  The client is planning to extend the property and convert it into two flats to sell on for a profit.

Obstacle

The property doesn’t have planning permission granted yet, but plan B (should the permissions not be granted), is to extend the property within permitted development rights, renovate to a high standard and sell on.

Outcome

The team at Brightstar has agreed terms with one of its panel lenders to lend the client 73% of the purchase price, totalling £586k plus interest and fees.  In addition, the client has a reserve pot of £138k agreed, which will cover the cost of obtaining planning permissions plus the conversion.  Should planning permissions be declined, the borrower can simply draw-down what is needed for the extension and renovation.

 

This case study that not only demonstrates how we’ve been able to obtain a high LTV of c80% gross, it shows how bridging finance provides flexibility to obtain pre-agreed funds for obtaining planning permissions, and the subsequent works. In this instance, the lender has assessed both plan A and B, and is happy that both are viable.

 

Summary of case:

  • Advance – £586K to purchase the property, with a further £138k for refurbishment costs
  • Rate – 2% fee, 0.69% PCM, no exit
  • Term – 18 month, rolled up facility
  • Commission paid to introducer – £8k (1% of the total facility).  This case was a name and telephone number referral and Brightstar is dealing directly with the client.

 

SUBJECT TO STATUS. 

PRODUCT AND CRITERIA AVAILABILITY SUBJECT TO CHANGE OR WITHDRAWAL AT ANY TIME.

FOR INTERMEDIARIES ONLY.

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