Our clients, highly experienced property developers, were looking to refinance an existing bridging loan secured against a 3-bedroom bungalow they owned. Their goal was to release additional capital to support the refurbishment of a commercial property bought at auction.
At a glance:
- Experienced developers and property investors
- Seeking a bridging loan to fund the refurbishment of a property bought at auction
- An existing bridging loan with 1 month remaining on its term
The Case:
Our clients had purchased an old bank at auction six months before approaching us, using funds from a bridging loan secured against a detached 3-bedroom bungalow with acres of land and outbuildings that they owned.
As experienced developers, they planned to refurbish and develop the former bank into a semi-commercial premises using additional capital raised by refinancing the original bridging loan. To secure this, they planned to use their 3-bedroom bungalow, as well as the former bank, as security. Once complete, the newly refurbished residential and commercial units would generate a strong rental income as part of their property portfolio.
When taking on a bridging loan, it is also essential to have a clear exit strategy, as this builds lender confidence and ensures the borrower has a plan for repaying the short-term loan.
Fortuitously for our client, the land with the bungalow was next to a large, newly proposed development with good access. With potential for future development on the land surrounding the bungalow, the value of this property had increased significantly since they secured the existing bridging loan, which would help our case.
The Challenge:
A key challenge in this case was time. The existing bridging loan had only 1 month left on the term, meaning our client needed to repay the remaining £472,000 or breach the terms of the existing bridging loan and roll onto a new rate of 1.5% per month, equating to monthly payments of £7,000.
We needed a lender that would accept both the residential bungalow and commercial bank building as security for a new bridging loan. Crucially, the lender had to complete valuations of the properties quickly, and in August, the height of the holiday season, when lenders are often stretched for resources.
Thanks to our experience and strong relationships with lenders, we found the perfect solution: a lender that accepted both property types as security and could move quickly. This allowed our client to repay their existing loan and secure a new bridging loan, enabling them to access the funds needed to start renovating the former bank building, thereby turning their plans into reality.
The Finance:
Property value: £1,120,000
Gross loan amount: £768,195
Net loan amount: £660,340
LTV: 69%
Rate: 0.99% monthly (11.88% fixed for 1 year)
Term: 1 year
Monthly mortgage payment: £7,605.08
Lender arrangement fee: 2% (£15,363)
*Rate as at August 2025
Next steps
If you have a similar project you would like to discuss, get in touch with one of our team.
