Bridging Loan For Property Developer Awaiting Sale Of Most Recent Development

Entrepreneurial developers don’t want to wait around while other adventurers come along and buy up the next building opportunity from under their noses. And they want to keep their builders busy working – for them.

The Scenario

Our client was an experienced property developer wanting a bridging loan against a completed development in Portsmouth.

There was no debt on the land, and she had paid for the build in cash. She just didn’t want to have to wait the two to three months for a sale to be completed before being able to crack on with the next development opportunity.

The catch was: when it came to processing the land title documentation, it emerged that there were two three-bedroom semi-detached houses built on the single land title.

When two properties are constructed on a single block, it’s not possible to separate the land into two titles until they are sold. Unless you sell them to yourself and incur all the legal expenses and stamp duty.

The Solution

The lender, who was taking a charge against the land title, was expecting that our client should repay the total loan when just one of the two houses was sold.

We persuaded them that the loan should be redeemed only on the sale of both houses, leaving our client free to proceed as a cash buyer in pursuing her next development opportunity.