- Client: Saudi national
- Property: New-build flat in Battersea
- Property value: £2.3M
- Loan amount: £1.61M
- LTV: 70%
- Bridging margin: 1.5% per month
- Term: 12 months
Bridging finance can provide a short-term funding solution where a property purchase needs to complete within a tight timeframe and a buyer’s original funding plans are no longer available. Enness was approached by a Saudi national who needed to complete the purchase of a new-build flat in Battersea within two weeks.
The client had originally intended to purchase the property entirely with cash. However, the transaction coincided with the financial uncertainty created by the COVID-19 pandemic, which affected the client’s available liquidity. With completion approaching, an alternative source of finance was required to ensure the purchase could proceed.
The property was valued at approximately £2.3M, and the client required £1.61M of short-term finance. This represented a 70% loan to value (LTV), providing the lender with a substantial level of equity in the underlying property.
The two-week completion deadline was the principal challenge. A conventional mortgage application would not necessarily have provided sufficient time to complete the necessary underwriting and legal processes. The client therefore required a lender capable of moving quickly while accommodating the circumstances surrounding the transaction.
Enness assessed the proposed acquisition and identified bridging finance as a potential solution. Short-term finance can be useful where a borrower needs to complete a property transaction quickly and intends to transition onto longer-term finance or otherwise repay the borrowing once the immediate funding requirement has passed.
Following negotiations with a suitable lender, Enness secured a £1.61M bridging facility against the £2.3M Battersea property. The facility was arranged at a margin of 1.5% per month over a 12-month term.
The structure provided the client with the funds required to meet the two-week completion deadline, allowing the purchase to proceed despite the change in their original cash-purchase plans.
The case demonstrates how residential bridging loans can provide flexibility when a property acquisition needs to complete quickly or a borrower experiences a temporary liquidity constraint. For international buyers, the appropriate lender and structure will depend on the borrower’s circumstances, property, available security, timescale and proposed exit strategy.
Enness works with specialist lenders on high-value and complex property transactions, including million-pound mortgages and short-term finance. Each application remains subject to lender criteria, underwriting, valuation and due diligence.
Important: Bridging finance is short-term borrowing and requires a suitable repayment or exit strategy. Where repayment depends on refinancing or another future source of funds, changes in circumstances, property values, lender criteria or market conditions may affect the anticipated exit 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.
