United Trust Bank’s (UTB) Structured Property Finance team was approached by an established Build to Let Developer-Operator to release £2.3m of equity from a recently completed mixed-use development.
The stabilised asset, situated near the centre of a growing Midland’s city, comprises 91 apartments and ground floor commercial space. The asset was valued at £23m and is already securing a £13m investment loan from another lender.
The borrowers had recently been awarded grant funding from a government backed housing accelerator initiative and needed the equity to invest in their next project by way of site assembly through options agreements.
The original investment loan secured against the property was fixed for five years at a very advantageous interest margin relative to current fixed term rates. Releasing further equity with a traditionally more expensive second charge bridge produced a better blended cost overall than refinancing the whole debt at current rates. UTB was comfortable that the asset was producing sufficient income to service their loan and that several possible exits were available in line with the developer’s investment strategy.
| Borrower | ‘Build to Rent’ Developer-Operator |
| Amount | £2.3m |
| LTV (combined) | 67% |
| Loan Type | Fully serviced second charge bridging facility |
| Location | Midlands |
| Term | 24 months |
| Loan Purpose | • Release equity towards the next development project |
| Special Features | • Facility sits behind a substantial investment loan provided by another lender • Low fixed rate on senior debt makes a second charge loan a better option than refinancing the whole debt at current rates |