UTB’s Bridging division was approached by an experienced developer requiring a facility to assist with funding the purchase of an investment property with significant potential for improvement. With the property in high demand, the borrower needed to move swiftly to secure the purchase. After acquisition, the intention was to apply for planning permission to substantially extend and remodel the property.
The Bank understood the client’s requirements and was able to agree funding for a 2 stage facility – an initial acquisition loan followed by a works facility once planning had been obtained.
An initial loan of £650k enabled the customer to secure the purchase in a matter of weeks, and provide them with an opportunity to apply for and secure planning permission for the proposed renovation and extension. On the basis of the proposed works, we provided the borrowers with an in-principle agreement for a subsequent additional works facility.
Once planning consent was achieved 8 months later, we formally agreed the second stage of the facility to provide 100% of the works costs.
Our Asset Manager quickly arranged a site visit and confirmed the works and cost estimates were all in order and that the £2m GDV of the finished project was realistic and achievable. The valuer also provided an update on his original report to incorporate the agreed planning. The additional amount of £600k, provided in tranches, would enable the borrower to complete the transformation of the property over a period of several months. At the same time, the facility was also extended by a further 12 months to give the borrower sufficient time to complete the project and either refinance the new and improved security into their growing portfolio or sell the property for a profit.
|Loan Type||Non-regulated bridging/heavy refurbishment loan|
|LTV||70% day one advance/ 70% Loan to GDV|
|Loan Purpose||• Initial bridge to purchase investment property |
• Additional amount provided to fund works once planning achieved
|Special Features||• Flexible facility to enable initial acquisition and subsequent improvement works|
•In principle agreement for works costs provided upfront ahead of planning
• 100% of works costs funded