TAB has provided a £335,000 bridging loan to an experienced property investor, secured against a buy-to-let property in Dollis Hill, north-west London, valued at £1m.
The 24-month, first-charge facility was structured at 33.5% LTV. The borrower, who holds eight rental properties, approached TAB to release equity from an existing asset following a court order requiring payment of a substantial sum.
The liability arose after the borrower lost an appeal against the London Borough of Barnet over an enforcement notice relating to another buy-to-let property, previously used as three self-contained flats. The property has since been returned to use as a single residence, and the confiscation order required the borrower to settle the outstanding amount.
Most of the facility went towards meeting that liability. The borrower also received £47,000 in net funds to support the maintenance of their wider portfolio.
The Dollis Hill property used as security was unencumbered, allowing TAB to take a first legal charge at a conservative LTV. The 24-month term is intended to give the borrower time to manage the wider portfolio and refinance the bridging loan onto longer-term finance. Underwriting was carried out by Justice Marima, one of TAB’s senior underwriters.
“This is a great example of how a bridging loan can provide a borrower with access to capital held in an unencumbered property when they need to resolve a time-sensitive financial liability,” said Calum Knight, TAB’s BDM for south-eastern England.
“The property provided substantial security for the £335,000 bridge, with the resulting 33.5% LTV giving us a strong lending position. The 24-month term also gives the borrower the time and flexibility needed to manage the wider portfolio and refinance. And, of course, the breach was unrelated to our security property.
“This deal demonstrates TAB’s ability to provide bridging finance against substantial residential assets where borrowers need to release equity to address specific financial requirements. Think TAB, think bridging.”
Robert Hershaw, founder and managing director of Active Investments, which introduced the loan, said: “Our client needed to raise capital against an existing buy-to-let property to settle a court-ordered liability, while retaining enough funds to continue managing their wider portfolio.
“TAB was able to structure the facility against the £1m property at a low LTV, providing the capital required to resolve the immediate issue while leaving the client with £47,000 in net funds. The 24-month term also provides useful flexibility while they arrange the longer-term refinance. Once again, TAB has brought momentum to lending.”
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