We were approached by a broker representing an experienced property developer to assist with the purchase of a property with a view to converting it into a 10-bedroom HMO.
Comfortable that the property and area were suited to an HMO and the projected conversion costs and works timeline were reasonable, UTB initially advanced £470,000 towards the purchase of the property, representing approximately 60% of the purchase price of £790,000.
The full cost of conversion works, estimated at £120,000, was made available in two additional tranches of £60,000 each. The total facility of £590,000 represented just over 51% of the projected £1.15m GDV upon completion of the works. The borrower plans to exit the loan by refinancing with a long-term BTL mortgage.
| Borrower | Property Investor/Developer |
| Loan Purpose | Property acquisition and conversion to HMO |
| Amount | £590,000 |
| Loan Type | Non-regulated Heavy Refurbishment Loan |
| LTV | 60% of Day 1 – 51% LTGDV |
| Term | 18 months |