A property investor encountered a few challenges with their project, including a breached lease, a lower-than-expected valuation, and a looming deadline on a bridge loan with another lender. Lendhub stepped in to quickly deliver a smart funding solution.
The client had bought a residential property in Tamworth at auction, with plans to turn it into a three-storey family home. The original funding came from a bridging loan secured against both the project and their main residence, but several issues came to light, leaving them racing against the clock to refinance their loan.
The Challenges
1. Solar Panel Lease Breach
During the refurbishment, the client took off solar panels to build a dormer roof, without realising this broke a lease agreement with the panel provider. The panels were there before they bought the property, and they didn’t know this would be an issue. It created a possible title problem, which could have affected Lendhub’s security.
2. Urgent Refinance Need
With the previous lender unwilling to extend the facility due to the property not being market-ready, and weekly penalty charges imminent, the client required urgent refinancing to avoid significant additional costs.
3.Valuation Shortfall
The client had predicted the post-refurb value based on local agent advice, but the valuation came back much lower due to a lack of similar sales in the area.
How we helped
- Tackling the Solar Panel Issue
Lendhub flagged the lease breach from the start and made it clear it needed sorting before or at completion. This helped the broker guide the client properly, and a good settlement was agreed. Lendhub reviewed the legal documents and payment proof to make sure the title was clean before completing.
- Working with the Valuation
Lendhub did question the downvaluation, but without many local comparables, the figure stood. We lent against the value provided, while still maintaining a strong position based on the client's evidence supporting a higher potential sale price.
The Outcome
Lendhub provided a £408k bridging loan at 75% LTV over 12 months, giving the client the funds they needed to refinance and avoid massive penalty fees. Now that the refurbishment is complete, the property is up for sale and the borrower is on track for a successful exit.
What our client had to say
“Thank you does not feel anywhere near enough for the efforts, the exceptions, and the work around that you and your team have made to get this over the line. I am very grateful for all of the support that you have provided!"
