Two experienced contractors were looking for funds to purchase and renovate a bungalow in Guildford. They approached Lendhub following a recommendation from a repeat client, for whom we have completed several deals.
The proposed works comprise light-touch modifications and a loft conversion. These works, paired with the property location and extensive construction experience under the borrowers' belt, made them the ideal Lendhub client.
Challenges
- The property had previously suffered from subsidence and was underpinned, with no guarantee or sign-off for the works.
- There were visible cracks in the structure, and a structural survey was recommended by professionals, which would increase costs.
- The borrowers had no development experience and no additional assets or liquidity.
- An asset manager concluded the works would cost more than the borrower predicted.
Solutions
- We backed the borrower due to their background as a contractor with underpinning experience, trusting their ability to manage the project.
- Rather than carrying out a survey, which would incur costs and delays, we relied on the borrower’s experience and historic surveys of the property.
- Post-completion we will carry out an inspection on the underpinning and have built in an additional cost line within the loan facility to support any possible unforeseen costs.
The Outcome
We delivered a £435k, 75% LTV refurbishment loan at 70% LTGDV over 15 months.
With funding secured to facilitate acquisition and full refurbishment, the client was able to move forward with the avoidance of delays and unnecessary costs. The project is progressing well, with a projected market value increase of £250k.
