Bridging Loan Secured for Barn Conversion Holiday Let in Rural Scotland

A family-owned development company in rural Scotland needed funds to convert a derelict barn into an attractive holiday let. Despite planning approval and a clear exit strategy, the project’s low initial value and remote location made it hard to place.

Clifton Private Finance secured a 12-month bridging loan with flexible drawdowns — overcoming geographical and structural hurdles to keep the development on track.

The Scenario

Our clients, a family-run limited company, approached us looking for funding to convert a run-down barn into a holiday let property. The Directors — a husband and wife team and the husband’s parents — had strong professional development experience, having completed projects in the construction and infrastructure sectors.

They had already acquired the barn outright and secured planning permission to carry out the conversion. What they needed was a lender who would accept the barn as security and fund the redevelopment in stages, starting with an initial release of £45,000 to kick-start the build.

The location and the property’s uninhabitable condition at the outset made this a highly specialised case. Adding to the challenge, the initial property value was £180,000, which sat at the lower limit of many bridging lenders’ criteria for development projects, especially for unregulated bridging loans.

The Solution

A Senior Broker at Clifton Private Finance led the case and quickly identified a shortlist of lenders who could accommodate:

• Rural Scottish properties
• Stage drawdowns over the conversion project
• Barn conversions with holiday let exit plans

After receiving offers from several lenders, we selected the most competitive deal for the client: a 12-month bridging loan for £180,000, including an initial release of £45,000, with the remainder to be drawn in flexible instalments as the project progressed.

Despite the complexities, we secured a very competitive rate of 0.99% per month, reflecting the client’s industry experience and the clear scope of the works. The estimated post-completion value was £285,000, offering a viable path to either refinancing or sale once the holiday let was operational.

An additional benefit of the staged drawdown solution is that the client will only pay interest on what is borrowed at any one time, as opposed to the full loan amount at once. This typically results in significant cost savings for complex projects that have big cost milestones spread across the year.

The Outcome

While the lending terms were in place early on, the legal process proved to be a hurdle — with solicitor delays threatening the loan’s timing. A valuation expired during the hold-up, but we remained in close contact with the clients throughout and ensured the valuation was extended, keeping the deal alive.

This was the family’s first development in their personal capacity, and the holiday let exit strategy required careful lender positioning. But with persistence, transparent communication, and a proactive approach, we delivered the funding they needed to move forward.

The bridging loan provided the flexibility to start building without delay, knowing additional funding was in place for the remaining stages. And with the potential for either holiday let income or a resale exit, the project is now well on track to becoming a valuable long-term asset.

Get started with our calculator

 

 

How much are you looking to borrow?

 

Get Started Now