Using Bridging Finance to Refinance a Multi-Unit Property and Fund a Residential Purchase

Client Background

Our clients were based in Harrow, Greater London, and owned a converted residential property comprising three self-contained flats valued at approximately £1.05 million.

The property had been fully converted with the appropriate planning permissions and certifications in place, positioning it well for future long-term investment finance.

Both clients were employed professionals with a combined annual income of approximately £125,000 and were looking to expand their property interests while purchasing a new home.

The Scenario

The clients required funding to refinance existing borrowing and support the purchase of a new residential property.

Their objectives were to:

• Raise approximately £528,000 through a bridging facility
• Repay an existing mortgage balance of approximately £328,000
• Fund a deposit towards a new residential property purchase valued at approximately £800,000
• Create separate leases for each of the three flats
• Refinance the property onto long-term investment mortgages once the lease structure was completed
• Structure the borrowing on a short-term basis

The strategy enabled the clients to unlock value from their existing asset while progressing a new residential purchase simultaneously.

The Challenges

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

The transaction centred around a multi-unit residential property requiring lease creation before long-term refinancing could be achieved.

The clients also needed to release capital quickly to support a new residential purchase, creating a time-sensitive requirement with a refinance-based exit strategy.

Traditional lenders were unsuitable due to the structural complexity of the property, the lease creation process, and the need for short-term flexibility.

The Solution

We arranged a tailored regulated bridging loan designed specifically to refinance the existing borrowing and release capital for the onward purchase.

The funding solution included:

• A net loan amount of approximately £528,000
• A 9-month term
• A loan-to-value of approximately 50.20%
• Rolled-up interest with no monthly repayments required
• First charge security against the property
• Fees added to the loan to maximise available capital

The structure enabled the clients to repay the existing mortgage, create the required lease structure, and move forward with the purchase while preparing for a future refinance.

Implementation Process

This case required a structured and proactive approach throughout the transaction.

We carried out a detailed assessment of the clients’ refinance requirements, property structure, and purchase objectives before arranging a bridging facility aligned to the proposed exit strategy.

A suitable lender was sourced that could accommodate multi-unit residential property security and provide sufficient flexibility while the lease creation process was completed.

Throughout the process, communication between all parties was managed proactively to ensure the funding completed efficiently and the onward property purchase could proceed without delay.

The Outcome

The bridging loan completed successfully, enabling the clients to refinance the existing borrowing and release capital for their new purchase.

As a result, the clients were able to:

• Repay the existing mortgage successfully
• Fund the deposit for a new residential property purchase
• Create individual leases for each flat
• Prepare the property for long-term refinancing
• Maintain flexibility through rolled-up interest with no monthly repayments
• Proceed with a clear and structured exit strategy