A guide to heavy refurb
CASE STUDIES
REGULATED HEAVY REFURB: COMMERCIAL-TO-RESIDENTIAL CONVERSION
Client circumstances: Our clients had recently purchased a former community hall which they had started to convert into a three-bedroom home for themselves. They had previously renovated a property, which had sold for a substantial profit and had allowed them to utilise the equity for the outright purchase of the community hall and its initial works. Planning permission had been granted and the refurb had already begun but, with their allocated funds for the project running low, a short-term fix was needed to complete the conversion. Outstanding works included, among other things, the installation of a staircase, preparation of some internal wall finishes, the plumbing and electrical second fix, and decoration and snagging throughout. Unable to secure high-street finance due to the property’s change of purpose, and keen to ensure the project schedule was not interrupted, their broker contacted our regulated division straight away. MT Finance solution: Understanding the need to prevent any interruption to the works, we worked quickly to issue a heavy refurb regulated bridging loan of £143,000 at circa 50% of the property’s OMV of £284,500. Interest was retained at 0.75% over a 12-month term. As the works continue, the market value of the property will rise, with the valuer predicting it to have a GDV of £446,000 once the renovation is complete. The benefits: Our regulated heavy refurb bridging loan ensured that the clients had the funds they needed to convert the community hall into their new three-bedroom home without facing any delays. With the property’s value projected to increase by over £160,000 once the works are complete, the clients can look to exit our bridging loan with a high-street mortgage based on their home’s new OMV. If this happens before the end of their 12-month term, they won’t face any ERCs or exit fees by using MT Finance. “The project was ambitious due to the scale of the conversion and the works needed to turn it from a large hall into a three-bedroom home. It was vital that funds could be provided as soon as possible to ensure the works could continue as planned. Teamwork was particularly important, and all those involved really pulled together to get this over the finish line as quickly as possible.” — Raphael Benggio, head of regulated underwriting.
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