A group of property investors approached Lendhub for funding to purchase and refurbish a semi-commercial asset in Ealing, London. With planning already secured, the borrowers aimed to transform the existing property, a retail unit and two-bed flat, into three high-spec self-contained residential units.
The Challenges
There were two key challenges to navigate on this deal. The first related to a credit history concern involving one of the borrowers, which required careful consideration during the approval process. The second was that the commercial unit would not be vacant at completion, meaning the borrower couldn’t begin refurbishment works immediately, adding potential risk to the project timeline.
Our Solutions
While there was a historic issue in one of the borrowers' credit record, the strength and track record of the other borrowers provided the reassurance needed to proceed.
To address the tenant still occupying the commercial unit, we worked with the borrower to structure a legal agreement that ensured vacant possession. The seller already had an arrangement in place for the tenant to vacate, which we transferred to the borrower as part of the sale. This meant the tenant was legally required to leave shortly after completion, allowing the refurbishment works to begin with minimal delay.
The Outcome
Lendhub delivered a £1m Refurbishment loan at 67% LTV and 63% LTGDV over a 12-month term. The facility enabled the borrower to acquire the property and proceed with confidence on a well-planned conversion in West London.
This deal reinforced the importance of understanding how Deeds of Surrender can be used to de-risk possession issues, especially when backed by sufficient financial incentives. With a well-drafted deed and proper legal structuring, it’s possible to move forward even when the tenant hasn’t vacated at the point of completion.
