Using Bridging Finance to Secure a Property Purchase Ahead of Sale

Client Background

Our clients were a married couple based near Truro in Cornwall, who owned a detached residential property valued at approximately £1.4 million.

They were both retired, with income primarily derived from investments of approximately £35,000 per annum, having previously built significant wealth through successful business ventures including the sale of a petrol station business.

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

The Scenario

The clients required funding to complete a time-sensitive property purchase while awaiting the sale of their existing home.

Their objectives were to:

• Raise approximately £225,000
• Bridge the gap between the sale of their current property and the purchase of a new property valued at approximately £995,000
• Exchange contracts quickly and avoid losing the new purchase opportunity
• Structure the borrowing on a short-term basis
• Exit the facility through the future sale of the existing property

The urgency arose because exchange deadlines were approaching, and without bridging finance the clients risked losing the new property purchase.

The Challenges

This case involved several important considerations that required fast action and careful lender selection.

The transaction represented a classic chain-break scenario, where the clients needed to complete the purchase before finalising the sale of their existing property. In addition, the transaction was highly time-sensitive due to approaching exchange deadlines.

The clients were retired with relatively modest income levels, although they held significant wealth within property and investment assets. The proposed repayment strategy also relied entirely on the successful completion of the property sale.

Traditional mortgage options were unsuitable due to the timing constraints and the reliance on sale proceeds as the repayment strategy.

The Solution

We arranged a tailored regulated bridging loan designed specifically to allow the purchase to proceed without delay.

The funding solution included:

• A net loan amount of approximately £225,000
• A 12-month term
• A loan-to-value of approximately 16%
• Rolled-up interest with no monthly repayments required
• First charge security against the property
• Fees added to the loan to preserve liquidity

The selected lender provided the speed and flexibility required to complete the transaction within the tight deadlines.

The structure enabled the clients to secure the purchase of the new property while maintaining flexibility regarding the sale of their existing home.

Implementation Process

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

We carried out a detailed assessment of the clients’ asset position, overall financial circumstances, and transaction timeline before structuring a bridging facility aligned to the chain-break purchase.

A suitable lender was sourced that could accommodate retired applicants and asset-based lending while also delivering funding quickly enough to meet the required exchange deadlines. The facility was then aligned carefully with the ongoing sale process of the existing property.

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

The Outcome

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

As a result, the clients were able to:

• Secure the new property purchase successfully
• Avoid losing the property due to timing pressures
• Maintain flexibility through rolled-up interest with no monthly repayments
• Complete the sale of their existing property in due course and repay the loan
• Transition smoothly between properties