Bridging Loans Case Studies
Bridging Loan pending essential repair work on a property that was deemed "not suitable for mortgage purposes"
The borrower had a deadline to purchase a house at a reduced price. The long term mortgage had been agreed, but was subject to a full retention pending completion of subsidence repair works in respect of an extension to the property. The works were the subject of an insurance claim that had already been made by the vendor and approved. We provided a high-speed bridge to assist with the purchase. The balance was provided from the borrowers own resources. The bridge was for a term of six months, which was sufficient time to complete the work and draw down the long term mortgage.
Why Hampshire Trust?
The property was deemed by the valuer to be unmortgageable in it’s present condition (based on the criteria adopted by the majority of residential lenders) and there was an extreme urgency to complete the purchase in order to benefit from the discounted purchase price. Our loan was completed within 8 days of interviewing the borrowers.
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Open ended bridging loan to raise capital
We provided a 9 month bridging loan to a 90 year old lady, to redeem her equity release mortgage and to provide additional funds to cover her living expenses, pending the sale of her long leasehold flat. She could no longer live alone and had moved into a nursing home. Our security was a first charge on the flat, which was on the market for sale. Interest was rolled up. All negotiations took place with her two sons, who had been given Power of Attorney.
Why Hampshire Trust?
Open ended bridging loan for an unusual purpose. The borrower's bank had already provided limited facilities via overdraft but had declined to lend further. All negotiations/signatures were dealt with using Power of Attorney.
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High Speed Bridge to fund the speculative purchase of an ex MOD property pending
the granting of planning consent
The borrower had exchanged contracts and had a deadline to complete the purchase or risk losing his deposit. The property comprised part of a former barracks with parade ground and outbuildings. The purchase price was £250,000, of which we provided £162,500; a loan to value of 65%. The balance was provided from the borrowers own resources. Interest was serviced during the 6 month term. The borrower’s intention was to obtain planning permission for residential development and then sell to a developer. He was able to demonstrate a good track record, having successfully completed a number of similar transactions in the past. The loan completed 7 days after our initial meeting with the borrower.
Why Hampshire Trust?
The matter was very urgent; open-ended bridging was required for a speculative development transaction involving an unusual property.
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High Speed Bridge to purchase an investment property acquired at auction
The borrower had attended an auction and agreed to purchase (contracts exchanged) a mid-terraced Victorian property divided into 7 bedsits for £36,500. He had paid the deposit from his own resources. He had previously been given an indication by his bank that they would provide the necessary funding to complete the purchase, but when he approached them with a formal application they changed their minds and declined to assist. When we received the application there were just 5 working days left to the contractual completion date. We provided a 6 month bridging loan of £33,600, taking as security a first charge on the property being purchased and 2nd charge on the borrowers home. Interest was serviced. The borrower had CCJ’s and mortgage arrears but these were satisfactorily explained. He was able to prove his income with accounts and we took into account the rental income from the investment property being purchased. The loan was to be redeemed, either by a re-mortgage with a buy-to-let lender, or the borrower will possibly request a transfer to a longer term loan with Hampshire Trust.
Why Hampshire Trust?
The matter was very urgent; open-ended bridging on a secondary investment property in need of repair; the borrower had mortgage arrears and CCJ’s and thus would not have been acceptable to the majority of mainstream lenders. We were prepared to take a view based on all of the information available to us.
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Speculative purchase of a closed nursing home with potential for planning gain
The borrower, a Chartered Surveyor and experienced property speculator, required a bridging loan of £196,000 to assist with the purchase of a closed nursing home from a Receiver, for £300,000. The balance was provided from the borrower’s own resources. The property valued at £280,000 and our exposure was therefore 70%. Interest was serviced. We agreed a 12 month term, during which the borrower was to apply for and hopefully obtain planning consent for conversion to luxury apartments and then agree a sale to a national developer, by whom he had been retained as a property “scout”. To reflect the extent of our participation, the profit potential of the deal, and the risk associated with a highly speculative project of this nature, we agreed an appropriate profit share as part of the overall pricing for the facility.
Why Hampshire Trust?
Open-ended bridging required on a closed nursing home in receivership. We were prepared to take a view on a highly speculative property transaction, based on our assessment of the individual and having negotiated an appropriate return for the risk.
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