Case Study · United Kingdom

Mortgage loan for property developer to upgrade and improve planning for a residential property

30 July 2021

Mortgage loan for property developer to upgrade and improve planning for a residential property

A property developer in London, United Kingdom has secured a mortgage loan to upgrade and improve the planning for a residential property. The funds will be used to make necessary improvements and enhance the value of the property, helping the developer achieve their investment goals and boost their bottom line. Rikvin Capital provided the mortgage loan, offering a flexible and reliable financing solution for the property developer’s needs.

Related: Read about when Rikvin Capital assisted a company in Scotland with internal restructuring through the refinancing of their commercial properties

  • Location: London, United Kingdom
  • Market Value: £8,400,000
  • Loan Amount: £5,425,875
  • Loan-to-Value: 65%
  • Duration of Loan: 18 Months
  • Payment Schedule: Rolled-up
  • Asset Type: Residential Property
  • Completion Time: 1.5 weeks

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FAQ

I want to upgrade a UK residential property and improve its planning value. Can you fund the works?

Yes. The London case lent £5.43 million against an £8.4 million residential property (65% loan-to-value) in 1.5 weeks for upgrade and planning works. The 18-month rolled-up structure meant zero monthly servicing during the upgrade period, with all interest settled at the end.

How is the loan exited after the upgrade?

Most commonly via either a long-term mortgage refinance against the upgraded (higher) valuation, sale of the upgraded property, or refinance into a development-finance facility for the next site. The borrower's exit choice usually depends on whether they intend to hold or sell the asset.

How long can a residential upgrade loan typically run?

Up to 24 months. The London case here ran 18 months, sized to give the developer time to complete works, achieve the upgraded valuation and arrange refinance. We can extend on request if the works overrun, subject to a fresh underwrite.