£367K Bridging Loan for Semi-Commercial Property Conversion in Bath

A property developer approached Clifton Private Finance for a bridging loan to acquire a vacant semi-commercial building in Bath and convert it into three high-end residential short-term lets.

The project involved purchasing a dated mixed-use property on Milsom Street for £565,000, securing planning permission for redevelopment and arranging follow-on development finance. Clifton Private Finance secured a £367,250 acquisition bridging loan at 65% LTV, providing the funding required to complete the purchase and progress the commercial-to-residential conversion strategy.

Bath Developer Acquires Semi-Commercial Property for Conversion

The client was purchasing the property for £565,000 with the intention of carrying out a substantial refurbishment and converting it into three high-end short-term rental units. As an experienced interior designer, they had a clear vision for creating a premium product aimed at Bath's growing holiday-let market.

The long-term plan was to secure planning permission, complete the refurbishment using development finance and ultimately retain the properties as an income-producing asset, before refinancing onto a specialist buy-to-let mortgage.

The Challenge: Financing a Commercial to Residential Project Without Planning Permission

The property presented several challenges that restricted the number of suitable lenders. We needed to:

• Finance a vacant and dated semi-commercial property requiring significant refurbishment
• Find a lender comfortable with the property's mixed-use characteristics
• Secure funding despite there being no planning permission in place
• Work around a substantial anticipated build cost relative to the property's purchase value
• Identify a lender that could potentially support the subsequent development finance once planning was granted

How We Secured a £367K Bridging Loan in Bath to Fund a Mixed-Use Property Conversion Project

We approached three specialist refurbishment lenders with experience of commercial and mixed-use properties & who understood the Bath property market. All three provided terms, giving the client a choice of suitable, cost-effective options while avoiding unnecessary applications to lenders without the right appetite.

We secured a nine-month acquisition bridge at 65% LTV, with the interest serviced to maximise the initial loan advance. This gave the client the time needed to progress the planning application, appoint their build team and prepare for the next stage of the project.

Importantly, we selected a lender that understood the potential of the client's vision rather than focusing solely on the immediate numbers. Their understanding of the strong market in high-quality short-term accommodation in Bath, and their ability to fund the subsequent works once planning permission was granted, also provided continuity between the acquisition and development stages.

Outcome: Acquisition Completed and Planning Phase Commenced

The £367,250 bridging facility enabled the client to acquire the Bath city centre property and begin progressing their plans to transform the dated mixed-use building into three high-end short-term lets.

By identifying a specialist lender at the acquisition stage, the client avoided the higher rates that a more generic bridging lender could have charged and secured a clear route towards development finance. Without specialist market knowledge, they could have faced both higher borrowing costs and the additional complexity of finding a new lender once planning permission was secured.