Bridging Finance for a Three-Bedroom to Four-Bedroom HMO Conversion

A client approached us seeking a 12-month bridging facility through his limited company to purchase a three-bedroom freehold property for £124,950. His intention was to refurbish the property and convert it into a four-bedroom HMO before refinancing onto a longer-term Buy-to-Let facility.

The Opportunity

• Purchase price: £124,950
• Client-funded refurbishment budget: approximately £20,000
• Expected refurbishment period: 8 weeks
• Anticipated GDV: approximately £170,000
• Planned exit: Refinance onto a Buy-to-Let mortgage

The client was an experienced property investor with a proven track record and an existing unencumbered Buy-to-Let property valued at around £200,000. He also had a clean credit profile and had sufficient personal savings to cover both the deposit and refurbishment costs.

The Challenge

The primary challenge was the client’s immigration status.

While he held Dependent Leave to Remain status valid until 2028, he did not have permanent residency. This required additional due diligence and careful consideration of his long-term residency position in the UK, as well as lender appetite for applicants in similar circumstances.

The Solution

We secured a 12-month unregulated bridging loan, allowing the client to move quickly on the purchase while self-funding the refurbishment works.

Key terms included:

• 12-month term
• 0.87% per month interest rate

By presenting the client’s wider profile, including his property experience, clean credit history, asset position, and clear exit strategy, we were able to place the case with a lender comfortable with the circumstances.

The Outcome

The transaction completed successfully, enabling the client to acquire the property and proceed with the planned refurbishment and HMO conversion.

With the works scheduled to take approximately eight weeks, the client remains on track to add value to the property and progress towards refinancing onto a Buy-to-Let mortgage.

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