There are many lenders in the bridging finance arena that shy away from any property that isn't habitable or ready to move into. Not so at Masthaven. The renovation and refurbishment bridging loan is something that Masthaven have been working on for some time and have had some very good deals come of it. Bridging & Commercial got an insight from Richard Deacon, Sales & Marketing Director at Masthaven Bridging Finance…

Whether the loan is for a purchase or a simple capital raise, so long as the property is structurally sound (and in some cases we can take a view on this factor) we are happy to lend.

The property may need re-roofing, new windows, a new central heating system, damp proofing, re-wiring, a new water system and boiler, kitchens, bathrooms or just a good general tidy up. Our view is that this work is adding value to the property.

We would lend initially on the current Open Market Value, not 90 or 180 day value, and we would also be able to assist the client by providing the funds in drawdowns if need be.

Our rates in this sphere of lending are the best in the market and we do not charge an exit fee.

Many high street lenders shy away from property that is not habitable or at least put 100% retention it until the works are done.

Renovation bridging could well be the answer to get the client out of this potential black hole.

Case Study

Mr Forsyth is an experienced property developer and needed Masthaven's help on his latest project.

Mr Forsyth needed help on a property that he had recently won at auction. The property was a three storey townhouse in a decent area of Nottingham that he wanted to convert into flats for the large student market that Nottingham has. The property had the correct planning in place, but what put many lenders off was the current state of the dwelling was one of very poor repair and certainly not currently habitable.

Masthaven lent 60 per cent of the purchase price of the townhouse which was a gross loan of £300,000 (Purchase price £500,000) from this we deducted the arrangement fee and six months interest so the client had to pay nothing on a monthly basis.

The client was in the fortunate position of having substantial equity in his own main residence, and Masthaven were able to secure a second charge over this to raise the additional £200,000 so the client effectively was lent 100% of purchase price.

The client had the money to do the renovation work himself and ended up doing the work in 12 weeks and obtaining a remortgage in nine weeks with which to pay us off.

Masthaven rebated the unused interest, and the client went away looking for further renovation and development projects against which Masthaven could lend.