Bridging Finance Enables Below Market Value Purchase in Devon

For property flippers, the ability to move quickly on attractive opportunities can make all the difference.

Our team recently assisted clients in securing a below-market-value property purchase through a specialised bridging loan at an extraordinarily high loan-to-value.

The Scenario

Our clients approached us having identified an excellent investment opportunity: a 2-bedroom semi-detached house in Devon, on sale for £120,000 despite a current market value of £140,000.

The vendor was motivated to sell quickly, offering the property significantly below its market value. Our clients were looking to carry out light refurbishments to improve the resale value to £180,000 and make a profit.

The main challenges they faced:

• Many lenders are cautious about BMV (below-market-value) deals
• Our clients needed to maximise their loan-to-value due to a lack of significant deposit
• They had a tight timeframe of 6-8 weeks to complete from offer acceptance
• And they needed to include additional capital for property improvements on top of the purchase price

The Solution

Our team quickly identified that this case required a specialist approach, and managed to secure a very unique product: a £103,000 bridging loan at 90% LTV (inclusive of interest and fees), and with a competitive blended interest rate (lower for the first 8 months, raising for the final 4 should they need it).

With an impressive time-to-offer of just 10 days, completion then followed 50 days later due to a few delays on the vendor’s side.