- Property Location: South East England
- Purchase Price: Circa £4.5 million
- Loan Amount: £2.5 million
- Term: Two years
- Purpose: Acquisition and planning for residential conversion
Enness was approached by a client looking to acquire a substantial historic property in the South East of England. The property was currently unused and had existing planning consent for commercial use, while the client’s intention was to explore its conversion into several luxury residential homes.
The proposed change of use meant that obtaining conventional long-term property finance at the point of purchase was unlikely to be straightforward. The client therefore needed a short-term funding solution that would allow them to secure the property while progressing the necessary planning application.
Enness reviewed the proposed acquisition and identified a lender comfortable with the nature of the transaction and the intended planning strategy. A £2.5 million standalone bridging facility was arranged against the circa £4.5 million purchase, with a two-year term.
The structure gave the client time to complete the acquisition and progress the planning process without having to secure long-term development finance before the proposed residential use had been established. This was particularly important given the existing commercial planning consent and the client's intention to pursue a different use for the property.
With the bridge in place, the client was able to proceed with the purchase while working through the planning requirements for the proposed residential conversion. The facility therefore provided the flexibility needed at a stage where the property's future use was still being established.
The case demonstrates how bridging finance can be used to acquire property where longer-term financing may depend on planning or a change in the property's intended use. For investors and developers, having a suitable short-term facility in place can provide the time needed to progress planning and determine the most appropriate long-term funding structure.
If you are considering a property acquisition where planning permission or a change of use is part of the strategy, speak to a mortgage specialist to discuss your funding requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or development advice. Finance is subject to status, underwriting, valuation, planning considerations and lender criteria. Bridging finance is short-term borrowing and may carry higher costs than conventional mortgage finance. Planning permission is not guaranteed and property values can fall as well as rise.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
