Background
Our client needed to raise £400,000 against a residential property to fund home improvements and inject capital into an existing business.
The original plan was to raise the funds through a second-charge bridging loan, allowing the client to retain the existing mortgage while accessing the additional capital required.
However, the property was far from straightforward. It consisted of three large properties across a single title, with historical boundary issues and complications around road access to part of the property.
Challenge
This case had more than its fair share of hurdles.
We initially secured a potential solution with a lender able to lend behind the existing mortgage. However, following a lower-than-expected valuation, the lender was unable to proceed at the required loan-to-value ratio.
We then approached the existing mortgage provider directly. While they were initially able to consider the borrowing, more than one missed payment was identified on the account, meaning they were unable to proceed.
The case was then moved to another lender, but they weren't able to lend behind the existing mortgage either. This meant we needed to rethink the structure completely.
The solution had to:
Raise the capital required for the home improvements and business.
Repay the existing mortgage.
Work around the property's complex title, boundaries and road access.
Provide a structure that worked despite previous lender declines.
Give the client the time needed to sell the property and invest in the business.
Solution
We restructured the case as a first-charge mortgage, allowing the existing mortgage to be repaid while also raising capital for the home improvements and business.
The new lender showed significant flexibility throughout the case. They were able to use the previous valuation rather than requiring a new inspection and could lend up to 70% gross.
However, the boundary and road access issues created another hurdle to overcome. The lender worked with us throughout the process to navigate these complexities and keep the case moving towards a solution.
Outcome
Despite multiple lender changes, a complete restructure and several property-related hurdles, we were able to secure a solution that provided the funding and flexibility required.
By finding the right lender and being prepared to change the structure, the client was able to:
Raise the capital required for home improvements and business purposes.
Repay the existing mortgage through a new first-charge facility.
Access lending at up to 70% gross.
Avoid the need for a new valuation inspection by using the previous valuation.
Get the time needed to sell the property and invest in the existing business.
This case shows that a decline doesn't always mean the end of the road. When a property is complex and the original structure doesn't work, persistence, flexibility and the right lender can make all the difference.
