Somo supports Luton property auction purchase with £330,000 bridging loan

Somo has provided a £330,000 first-charge bridging loan for a seven-bedroom semi-detached property in Luton secured at auction for £440,000.

The borrowers plan to refurbish the property before refinancing onto a long-term BTL mortgage.

With the property being vacant and requiring a full refurbishment, Somo said conventional mortgage funding was not suitable in its current condition.

Speed was key to meet the auction deadline and move the deal from application to completion without unnecessary delays, enabling the borrowers to secure the purchase and move ahead with their refurbishment plans.

The funding was agreed over a 12-month term at a rate of 0.82% per month.

Despite its current condition, the property offers considerable potential.

The valuation identified a GDV of £525,000 following refurbishment, while the borrowers already had a Decision in Principle at £330,000 for BTL refinance, providing a clear exit route.

By looking beyond the property's current condition and assessing the strength of the borrowers, their existing property experience and their refinance strategy, Somo was able to support the auction purchase in 18 days from start to finish.