An unusual refinancing of refurbishment project debt

At United Trust Bank we meet many borrowers who have completed a refurbishment or development project and who wish to repay their investors or development funders before all or part of the project property is sold.

In this particular instance we had the relatively unusual scenario where not only was the debt requiring refinance, but the completed refurbishment property was not our security.

Our borrower has been active in the London property market for over 30 years and had completed the refurbishment and extension of a Central London property at a cost of £1.4m. The borrower needed to repay some of the development costs which had been covered by an overdraft facility and credit card.

However, the refurbished property, being marketed for sale at £6.9m, was in fact owned by another family member. Fortunately, our borrower and his wife owned another property which was also for sale and which, given the circumstances, it made sense to use as the loan security by way of a first charge.

Head of Bridging at United Trust Bank Alan Margolis commented: “This is a good example of the flexible and bespoke nature of bridging finance where the property behind the reason for the bridging loan was not used as the security. In this case given the different ownership of the refurbished property, the low LTV and the fact that a £6.9m home may take longer to sell than the lower value security property, this was a sensible and cost effective solution.”


LTV: 44%

Loan Amount: £583,100