heavy refurb for uninhabitable property, KT24
Clients had purchased a residential investment property and had recently been granted planning permission to demolish the property and build an extended two-storey dwelling to increase its square footage. They had started the works using their own funds but when it came to raising further funds, they were unable to get a buy-to-let mortgage as the property was now deemed uninhabitable.
The clients quickly needed an additional £394,000 to complete the works and redeem their first charge lender. As time was of the essence, their broker contacted us straight away.
MT Finance solution:
We provided a £394,000 heavy refurb bridging loan at 51% LTV of the asset’s £780,000 open market value, and at the same time redeemed the client’s first charge loan. Interest was retained at 0.85%, over a 12-month term. There are no exit fees or early repayment charges.
We also agreed a further drawdown of £200,000 to assist in the build once the property’s value increased.
By taking out our heavy refurb bridging loan, the clients were able to continue with the conversion which once works were complete, expected to fetch a GDV of £1.5 million. They will then be able to refinance out of our bridging loan with a traditional buy-to-let mortgage, against the property’s higher value and enjoy a high-income generating property in their portfolio.