Using Bridging Finance to Secure a Downsizing Property Purchase with Dual Security and a Sale Exit

Client Background

Our clients were a married couple based in Bicker Fen, Boston, Lincolnshire, who owned a detached residential property set within approximately six acres and valued at around £695,000.

One client was a housewife, while the second was a landlord with experience managing a substantial residential property portfolio generating rental income.

At the time of the application, the existing property was unencumbered with no mortgage, placing the clients in a strong overall equity position.

 

The Scenario

The clients were looking to downsize and had secured a new residential property purchase.

Their objectives were to:

• Purchase a five-bedroom residential property valued at approximately £500,000
• Raise an additional £50,000 for stamp duty and associated costs
• Secure total funding of approximately £550,000
• Complete the purchase quickly to avoid losing the property
• Use their existing property as additional security
• Structure the borrowing on a short-term basis
• Exit the facility through the future sale of their existing property, which had already been placed on the market

The clients needed to proceed quickly in order to secure the purchase while allowing sufficient time for the sale of their current home.

The Challenges

This case involved several important considerations that required specialist lender selection and careful structuring.

The transaction represented a chain-break scenario where the clients needed to complete the purchase before selling their existing property.

The case also involved a relatively high loan requirement, income constraints, and a dual security structure using both the new and existing properties as security.

Traditional lenders were unsuitable due to the affordability limitations and the need for a fast, flexible completion process.

The Solution

We arranged a tailored regulated bridging loan designed specifically to facilitate the purchase while allowing the clients time to sell their existing property.

The funding solution included:

• A net loan amount of approximately £550,000
• A 12-month term
• A loan-to-value of approximately 41.84%
• Rolled-up interest with no monthly repayments required
• First charge security against the new property, with additional security over the existing property
• Fees added to the loan to preserve liquidity

The structure enabled the clients to secure the purchase quickly while maintaining flexibility around the sale of their current home.

 

Implementation Process

This case required a responsive and carefully structured approach throughout the transaction.

We carried out a detailed assessment of the clients’ asset position, income profile, and property strategy before structuring a bridging facility aligned to the proposed property sale exit.

A suitable lender was sourced that could accommodate the dual security structure, lower affordability profile, and time-sensitive nature of the purchase while still delivering funding quickly enough to secure the property.

Throughout the process, communication between all parties was managed proactively to ensure the transaction completed efficiently and without unnecessary delays.

 

The Outcome

The bridging loan completed successfully, enabling the clients to secure their new property while progressing the sale of their existing home.

As a result, the clients were able to:

• Secure the new downsized property without delay
• Avoid losing the purchase due to a broken chain
• Proceed with the sale of their existing property at market value
• Maintain flexibility through rolled-up interest with no monthly repayments
• Transition smoothly into their new home