UTB’s Bridging division was approached with a request to borrow £725,000 towards the purchase of a terraced house in London.
The borrower, an SPV set up for this project, intended to obtain planning permission for a full refurbishment of the property including a loft conversion and creation of a roof terrace. If the planning application was unsuccessful, they would undertake a lighter internal refurbishment. The £725,000 requested included a small consideration towards the refurbishment regardless of the planning outcome. Although inexperienced, the client had found a reputable main contractor we were happy would be capable of carrying out the planned work.
To make the deal work, the borrower offered a 3rd party 2nd charge on their main residence. This was owned privately and outside of the SPV, and the borrower took independent legal advice on the potential implications of this solution.
Having completed the purchase, planning was successfully obtained, and the Bank agreed to refinance the original bridging loan, transferring it to a UTB Refurbishment Loan. The new facility also provided an additional £240,000 as a drawdown facility to cover the cost of works. The GDV of the finished property was estimated at £1.2m.
The borrower’s contractor completed the works swiftly and the property placed on the market for sale. A buyer was quickly found, and the borrower repaid our loan taking a healthy profit.
| Borrower | SPV |
| Amount | £725,000 – increased to £965,000 |
| Loan Type | Unregulated – Heavy Refurb |
| Term | 18 months |
| Location | London |
| LTV | 70% Day 1 |
| Loan Purpose | Purchase of refurbishment opportunity |
| Special Features | • Original standard bridging loan transferred to a refurbishment loan with additional funding for works • Exit from proceeds of sale |