A first-time borrower approached Lendhub looking to purchase a well-located, two-bedroom flat in Exmouth. Though the asset came with a few quirks, our borrower brought a solid plan, industry know-how, and a hands-on approach that made this deal one to back.
The flat, while dated, had strong fundamentals: a large garden, ample parking, and clear potential. But it also came with a short lease, only 52 years remaining, and needed around £25k of refurbishment works to bring it up to modern standards.
Challenges
- Short Lease: The leasehold interest was just 52 years at purchase.
- Valuer Opinion: The valuation report cast doubt on the borrower’s proposed GDV, suggesting there would be little uplift.
- Sales Exit Disputed: On the valuer’s GDV, a sales exit didn’t stack up, but the borrower and our team believed that opinion fell short of market reality.
Solutions
- We structured an 80% LTV bridge to fund the purchase, which included a lease extension to 110 years as part of the agreement. This allowed the borrower to self-fund the refurbishment
- Carried out a detailed review of local comparables, highlighting multiple sales that supported a much higher GDV than the valuer had stated.
- Built in flexibility on exit, with a fallback refinance route that would comfortably redeem the facility even if a quick sale wasn’t achieved.
The Outcome
We delivered a £114,000 facility at 80% LTV, allowing the borrower to move forward with the purchase while keeping full control over the works. Despite the challenges posed by the valuation, our team took the time to understand the borrower’s model and the local market.
The flat is now being refurbished, with works due to complete in four months. The borrower aims to sell at around £200,000 a price point supported by recent market activity.
Hear from Caimin, Credit Manager
“This deal represented a great opportunity to work with a direct borrower, looking to secure their first investment asset. We worked closely with the applicant, in the face of an unexpected down valuation, to maximise our support and facilitate the acquisition. It was a pleasure to forge a new relationship and reach completion on this case.”
Caimin Bugler, Credit Manager
