Loans Warehouse completes first bridging loan with Castle Trust Bank for purchase and refurbishment

Loans Warehouse has completed its first bridging loan with Castle Trust Bank, to support the purchase and refurbishment of an investment property in Andover, Hampshire.

The client, an experienced builder and property investor, was purchasing a three-bedroom semi-detached house for £255,000 through his limited company.

The property required significant improvement works and was not considered suitable for a conventional BTL mortgage in its existing condition.

The planned refurbishment included replacing the conservatory and installing a new kitchen and bathroom as well as completing general redecoration.

Once the works are finished, the client intends to retain the property as a BTL investment, with an anticipated rental income of approximately £1,500 per month.

The client’s priority was to maximise the amount available towards the purchase while funding the refurbishment works separately from his own resources.

Castle Trust proved the right solution by providing a high day-one advance without requiring the refurbishment budget to be retained or released through a drawdown facility.

The lender provided a 12-month first-charge bridging loan at 80% LTV, with a monthly interest rate of 0.73%.

The facility delivered a net loan over £200,000 against the £255,000 purchase price.

Following refurbishment, the client plans to refinance the bridging facility onto a longer-term BTL mortgage.

A mortgage offer with a retention was already in place, giving the client a clearly defined exit route once the required work has been completed.

The property is expected to have a post-works value of approximately £325,000.

Anna Lewis, commercial director property at Castle Trust Bank, commented: “We’re delighted to have completed our first bridging loan with Loans Warehouse.

“The teams worked together closely on this case to achieve swift completion, ensuring that any potential hurdles were anticipated well in advance.

“We look forward to working with Loans Warehouse in the future and helping many more of their clients.”

Vikki Edwards, head of bridging and development at Loans Warehouse (pictured above), added: “This was a fantastic first completion with Castle Trust and a great example of why having access to a broad lender panel is so important.

“Castle Trust understood the client’s experience, the strength of the project and the proposed exit.

“Its team also worked quickly on the day of completion, approving the final documentation and releasing funds in time to meet the contractual deadline.

“We look forward to completing many more cases with them.”