Short term lending for major renovations on unmortgageable London dream home

These clients came to us thinking they needed bridging finance. We found an alternative type of short-term lending that suited them better.

The Scenario

Our clients had been holding out for a house to come on the market on a very specific road they’d targeted, overlooking a park in South London.

Finally a property came up for sale at £1.15M, but – it was a bit of a wreck. No kitchen, no hot water: it was unmortgageable.

They needed short-term finance until they could get the essential works done and refinance out onto a mortgage.

They’re both big earners for major financial services companies but one partner is a US national resident here on a spousal visa.

The Solution

We knew the visa issue wasn’t going to be a problem with finding lending.

More of a challenge was going to be how long these renovations are going to take, and how much the borrowing might cost our clients.

We steered them away from a standard bridging loan: the 12-month term could have been a  very tight schedule for them. We found alternative short-term finance for a third of the cost.

This lending product is like a regulated bridging loan, but the minimum loan size is £300K and the minimum income required is £100K.

Their finance can run for up to two years at 0.25% a month, and has no early-exit fees if they finish their renovations early and are ready to mortgage.

They came to us on a Tuesday, we had credit approval for them by the following day, and an offer subject to valuation by the Thursday.