Finish and exit on a London residential renovation

Area
West London
Capital Raised
£150K

Some owner-builders and small-scale developers are hesitant about bridging finance. This is a prime example of when it’s a flexible - and affordable - way of injecting funding into a building project that still has a fair way to go.

The Scenario

The call came through at a weekend: a couple had bought their classic London terrace in Shepherd’s Bush 15 years ago for a now-unbelievable £290K. (A leasehold maisonette – the lower flat was separately owned.)

They were mortgage-free, and had saved £150K to get a major renovation underway: a loft extension and side extension that re-mapped the footprint of the building.

They were pretty much at bare walls stage: no kitchen or bathroom, no boiler or proper living space. They just needed another £150K to finish off their project.

The Solution

They approached another firm of brokers at the same time they came to us.

We looked at their architectural plans, their schedule of works and builder’s report and said: "You won’t get a mortgage at this stage, but we can set up bridging finance for you."

The other brokers told them they could get mortgage finance – so of course the clients went with them.

Three and a half weeks later, they’d paid for a valuation which gave the prospective lender a Nil valuation for a mortgage. The property was categorically classed as "uninhabitable" in its current state, and their application was refused.

The client had lost valuable time spending their own cash reserves to keep the project afloat - plus the cost of the valuation. 

Back to us, and we knew that the regulated bridging lender we work with (who is able to offer finance on homeowner projects) wouldn’t be focused on mortgageability. They’d be looking at the value of the site and the bricks and mortar, the amount of money that had been spent on the project, and its future value.

Their valuer put a value of £650K on the property in its current state, with a projected GDV of £900K.

We double-checked that they’d accept this as now being a light refurbishment rather than a heavy refurbishment: a difference of 0.2% per month on the rate. They would. (On larger borrowing this would be a really significant saving.)

Finance arranged at 0.55% over 12 months, with just a 2% arrangement fee, and no exit fee: the clients expect to be finished in six months, and we’re setting up their exit onto a residential mortgage.  

More about bridging finance for building projects

Jack Spillane

Finance Broker

Bristol

0117 959 5094

Is your situation similar to this? I specialise in helping clients who need creative development finance solutions, and second-charge mortgages. Give me a call any time and we can set up a detailed discussion of the finance you need.

Mathew Phillips

Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need.

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements.

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