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Our borrower, a very experienced property developer, required a bridging loan to purchase a dilapidated house in Croydon in order to sell the property on to a prospective developer. Having agreed to purchase the property, they applied for – and received – planning permission to convert the house into flats post-exchange.
This is the sort of loan that a challenger bank struggles to lend on, because there was no clear exit strategy, as the borrower wanted to keep their options open. Our borrower had the option to sell as-is, apply for further planning uplift, or even carry out the development themselves. They had gone to another lender who was uncomfortable with this uncertainty; and what’s more, that lender’s surveyor undervalued the property as well. This is where we came in! We knew the borrower well, and given their strong financial position and track record, we were happy to work with the developer in a tight timeframe to structure a loan that would keep their options open. In the end, the borrower went for and received the additional planning, and sold the property on without issue.
