AREA: Dartford
AMOUNT RAISED: £440,000
PRODUCT USED: Cross charge bridging finance
Property development in the South East offers solid opportunities for the right investor. But what happens when you find the perfect project without having immediate access to funds? Here’s how we helped one property investor turn their plans into reality using well-structured bridging finance.
Client Scenario
An experienced property developer identified a £330,000 mixed-use building in central Dartford. The property comprised a ground-floor shop with office space above. Our client saw the potential to convert the upper floor into two residential flats under Permitted Development rights, with estimated renovation costs of £60,000.
The challenge? They needed full funding for both purchase and renovations. Fortunately, they owned an unencumbered residential property worth £300,000 in Gravesend.
Funding Solution
We set up a cross-charge bridging loan using both properties as security. This arrangement secured a loan of £247,500 against the mixed-use property (75% LTV) with the balance secured on the Gravesend property.
The combined facility covered:
- Full purchase price: £330,000
- Renovation costs: £60,000
- Legal fees and other costs: £24,000
- Interest roll-up for the 9-month term
We obtained a rate of 0.79% per month, with one set of legal fees and a straightforward application process thanks to the cross-charge structure.
Final Outcome
The project finished on schedule within 7 months. The retail unit now generates £25,000 annual rental income, while the two flats bring in £40,000 combined. The completed property values at £535,000 – showing healthy appreciation from the purchase price.
By using existing assets effectively and applying the right bridging finance solution, our client transformed an underused property into three income-generating units.
The cross-charge approach kept costs down and made the process smoother. We then arranged refinancing for both properties onto competitive commercial and buy-to-let mortgages.