Refinancing and Refurbishing: Helping a Brighton Property Investor Navigate Lease Plan Hurdles

An experienced property professional approached Lendhub looking to refinance and refurbish a commercial asset in Brighton. With planning already secured, their goal was to convert the vacant upper floors from an office into an 8-bed HMO while keeping the ground-floor commercial unit in place. The scheme had solid fundamentals: a strong location, rising demand for shared accommodation, and a clear delivery strategy. However, a technical issue around lease plans threatened to delay progress.

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Challenge

Lease Plan Mismatch
‍The existing lease plan for the property didn’t align with the approved planning drawings for the HMO conversion. This created uncertainty around the layout and boundaries of the commercial unit.

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Solutions

• We facilitated talks between the borrower, valuer, asset manager, and solicitor to carefully review and compare the lease plans
• Worked to secure an updated lease plan that accurately reflected the approved HMO layout and the retained commercial unit below
• Took comfort from the light-touch nature of the works, limiting construction risk, and from the borrowers’ track record of completing nine similar schemes in the past 4 years

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The Outcome

We delivered a £786k loan at 74% LTV and 64% LTGDV over a 12-month term. This allowed the borrower to refinance the existing asset and fully fund the conversion of the upper floors into an 8-bed HMO. With a commercial tenant already in place below and a clear plan to refinance onto a commercial mortgage at exit, our facility allowed the borrowers to move forward with confidence.

With rents projected at £750 per room and each unit benefiting from a high-spec finish and kitchenette, the scheme is well-positioned to meet growing demand from students and sharers in Brighton.

This deal showcased the power of clear planning, experienced delivery, and collaboration with our professionals.

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