The Client
The client, resident in Bermuda, had an initial enquiry for bridging finance. He had bought a property in Suffolk in 2018 and was prepared to spend around £850,000 on developing it, with the property valued at £1,000,000. The property was unencumbered.
The Scenario
The client wanted to raise £300,000 net via bridging finance, needing the funds quickly to complete the final stage of works on the property.
The Solution
After further discussion, we established that the client held other commercial properties, which helped address lender concerns around the case being treated as regulated bridging finance. This suited the client well, since his exit strategy was to move onto a buy-to-let mortgage as an expat, which we would also arrange, giving him one point of contact for the whole journey from bridge through to long-term finance.
Summary
Current maximum loan-to-value for bridging finance sits around 75% on first charge bridges, typically lower on second charge bridges at around 60%. Structuring a case correctly from the outset, including the eventual exit route, can make the difference between a straightforward bridge and one that runs into lender concerns partway through.
Frequently Asked Questions
What loan-to-value can I get on a bridging loan?
First charge bridging loans typically go up to around 75% LTV.
Second charge bridges are usually lower, typically around 60%, depending on the lender and the security offered.
Can I get bridging finance as a UK expat?
Yes, expats can access bridging finance against UK property.
Holding other property assets can also help address lender concerns, particularly around whether a case is treated as regulated or unregulated bridging.
What is the difference between regulated and unregulated bridging finance?
Regulated bridging applies where the loan is secured against a property the borrower or a family member lives in.
Loans secured against investment or commercial property, or where the borrower holds other property assets, are more likely to fall outside FCA regulation.
Can a bridging loan be arranged alongside a future buy-to-let mortgage?
Yes, planning the exit strategy at the outset is one of the most important parts of a bridging case.
Arranging both the bridge and the eventual exit mortgage through the same broker can make the transition between the two considerably smoother.
Commercial Finance Network is a whole-of-market FCA authorised commercial finance broker working with property investors, developers, and businesses across the UK and internationally. We work across the full specialist bridging panel and will tell you which lenders will engage with your deal, what LTV and rate to expect, and how to structure the application before anything is submitted.
Commercial Finance Network is directly authorised and regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it. Buy-to-let and business-purpose lending secured against investment property is not regulated by the Financial Conduct Authority.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related Pages
- Bridging Loans – fast, flexible funding secured against property
- Buy-to-Let Mortgages – whole-of-market advice for landlords across the UK
- Bridging Loan 75% LTV – what is actually possible on maximum loan-to-value bridging
- Bridging Loan Calculator – estimate monthly interest and total borrowing costs
