Lakeshield and Ultra Property Finance partner on £1.7m loan for listed conversion

Lakeshield and Ultra Property Finance have completed a £1.65m bridging loan in two weeks to meet a borrower deadline for a lower purchase price.

The loan funded the purchase of a converted period house containing five self-contained flats in Southwark, London, with title and planning deficiencies alongside a protected Rent Act tenancy on one flat.

The borrower, an experienced property investor, agreed to purchase the Grade II-listed property at £2.2m following a seller's demand for a fixed completion deadline.

With an estimated open market value of the property of £2.5m, by meeting the deadline, the borrower acquired the asset approximately £300,000 below the OMV.

Lakeshield lent 75% LTV against the agreed purchase price.

The property comprises a freehold semi-detached period house converted into five two-bedroom self-contained flats.

The conversion, completed in 1989, carried limited Building Regulations compliance evidence from the previous owner.

To cover any title and planning risks, Westcor title insurance was used, even with the planning enforcement periods having expired, removing any enforcement threat.

Additional complexity lay in the lower ground floor flat, which was subject to a protected Rent Act tenancy, which confers security of tenure on the sitting tenant. A break-up valuation specific to that flat was used to accommodate this.

The block's overall security position was lower than five individually saleable flats would have been; that reduction in liquidity was factored into the security assessment and pricing.

The transaction moved from legal cost undertaking to completion in two weeks.

The loan term runs for 12 months with interest serviced monthly at 0.99% per month.

Jon Sturgess, BDM at Lakeshield (pictured above), commented: "We're incredibly proud of the outcome achieved on this case.

“Completing a £1.65m loan in just two weeks on an asset with this level of complexity is a strong reflection of the experience, capability and determination of our team."

Alex McMillen, director and founder of Ultra Property Finance, added: “Lakeshield moved quickly, the legal teams were proactive, and the client was fully engaged throughout.

“Our role was to bring all parties together, keep the structure tight, and maintain momentum so the transaction could complete within the seller’s deadline.

“The client secured a strong asset at a significant discount, and we’re pleased to have played a key part in getting it over the line.”

The client added: “Alex took the time to understand exactly what I needed, moved quickly, and worked tirelessly to get the deal completed within a tight timeframe.

“He was always responsive, understood the requirements of the transaction, and kept everything on track when it mattered most.”