The client
An experienced investor / landlord, and father, keen to introduce his daughter to the world of property investment. In this case, our client was using a property he owned in North London which had been converted into two flats as security - using one of the flats as security for the loan.
The client had taken a leap of faith and raised money on another bridge against his property. The money raised from the bridge he generously gifted to his daughter so she could invest for the first time in a property, carry out works and then rent it out.
His exit strategy was to refinance both his and his daughter’s property onto long-term Buy-to-Let mortgages once works were complete. However, his daughter’s project to get the property ready for market overran and was completely put on hold when the Covid-19 pandemic urged the UK government to freeze the property market, and pause all works deemed as non-essential.
With expensive costs approaching as a result of not being able to pay back the existing bridging loan, the client reached out to their mortgage broker, SPF Private Clients for advice. SPF advised that the best course of action would be to take out a new bridging facility with an alternative lender to redeem the existing bridge. They recommended West One, having worked with us on numerous successful transactions previously.
This case was submitted to us just a day after the UK’s coronavirus lockdown was enforced – on the 24th March. With heavy restrictions in place, and a brand-new lending environment for everyone – this was one of our first cases which required creativity and flexibility in unique circumstances.
First and foremost, we needed to find a way to get the property valued accurately, without a physical internal visit of the property being available. With help from our panel of surveyors, we were able to source a surveyor prepared to carry out an external inspection of the property. Unfortunately, the valuation came in lower than expected which pushed our LTV higher than we would have liked without a full inspection. However, we carried out our own further due diligence and were able to get comfortable to proceed.
Once all parties were satisfied, and both paperwork and legal processes approved, West One were ready to complete the bridging loan of £390,000 against the dad’s property. With the bridging loan on a 12-month term, our client will then be able refinance to a BTL mortgage once surveyors are able to go out and inspect the property fully again.
The proof is in the pudding for this particular case. As experts in specialist lending, navigating deals through the most complex scenarios doesn’t often involve lending when the entire market is placed on lockdown. With our deep-rooted experience in the property market, married with our strong valuer relationships – we were able to offer our client a bridging loan at the hardest of times.
Result
Unlike many typical scenarios of a bridging loan. This loan was not just to complete a deal - it was able to ease pressure on a potentially detrimental father-daughter scenario. With a 12-month term, the bridge gives the client ample breathing space to pay back the loan.