- 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 able to consider 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 relevant 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 provided short-term funding while the property’s future use was 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, a suitable short-term facility can provide time 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.
Important: Bridging finance is short-term borrowing and requires a credible and achievable repayment or exit strategy. Where repayment or refinancing depends on planning consent or a change in the property’s intended use, delays or changes to the planning outcome may affect the anticipated financing strategy and the overall cost of borrowing.
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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.
