Skip to Main Content

Bridging loan for house to flats conversion

We were approached by a married couple looking to purchase their second buy to let property - a 3-bed terraced house in Manchester.

Before renting out the property the couple were planning to convert it into two self-contained flats. Not only would this increase the potential rental income it would also increase the overall property value by circa £60k.

Neither husband or wife had ever carried out a project like this before, so we needed to approach a lender which would offer short-term finance to inexperienced applicants.

The couple expected the works to take just over six months to complete at which time they plan to refinance onto a buy to let mortgage.

Funds were received within 28 days of applying.

Here are the details of the deal:

Property Details

Property value: £134,000

Loan amount: £93,800

Expected value(after works): £200,000

LTV: 70%

Rate: 1.25% per month

Term: 9 months

Lender facility fee: 2% (£1,876)

Lender exit fee: interest for 1 month 

Monthly payment: £1,172

Rental income: £1,500 expected after works complete

Anticipated yield: 9% pa

Consultant: Gavin Elley, 01625 416398

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Mortgages for Business Ltd is registered
in England and Wales No. 2502713.

Registered office:
17 Kings Hill Avenue,
Kings Hill, West Malling,
ME19 4UA.

© Copyright 2023. All rights reserved.

Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.

NACFB