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Case Study: Bridge to Renovation

Case Study Bridge to Renovation Loan

The property owner faced a dilemma with their charming five-bedroom period mid-terrace house. Having initially borrowed against the property for business purposes, they needed a bridging loan to pay off the existing charges and refurbish their home to its former glory.

The property, located in a desirable conservation area, boasts a valuation of £2,600,000. However, it requires some repairs and maintenance, presenting both opportunities and challenges. The borrower plans to eliminate the second and third charges using their own funds, supplemented by a bridging loan, with the intention of refinancing once renovations are complete.


  • Valuation: £2,600,000

  • Initial Gross Loan: £1,216,236

  • LTV: 65%

  • Exit Strategy: Refinance

  • Location: London

  • Property Type: Three-storey owner-occupied house, built circa 1890

Strengths: Attractive period house, desirable conservation area, proximity to local amenities, good travel connections

Opportunities: Letting potential, refurbishment potential, extension potential (subject to planning consent)

Weaknesses: Property requires repair/maintenance, mid-terrace detachment may limit appeal, no off-street parking, hillside location, no Energy Performance Certificate (EPC)

Threats: Economic impact of global events (e.g., war in Ukraine, COVID-19), uncertainty over UK economy, Stamp Duty Land Tax (SDLT) surcharges, rising interest rates

Exit strategy: The borrower aims to leverage the bridging loan to clear existing debts secured against their property and undertake necessary refurbishments. They see potential in enhancing the property's value through renovations, enabling them to refinance the property at a later stage, once the improvements are complete.

In navigating the challenges posed by existing debts and the need for property renovations, the borrower has opted for a bridging loan to bridge the gap. With careful planning and execution, they aim to transform their period home into a lucrative asset, capitalising on its strengths and maximising its potential in the market.


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