Shawbrook provides heavy refurb bridge to convert single dwelling into HMO


Shawbrook Bank has provided a heavy refurb bridging loan to convert a run-down, single dwelling house into a six-bed house of multiple occupancy (HMO).


Shawbrook was approached by broker partner Go Finance, seeking a short-term finance solution for a client planning to covert a single-family dwelling.

The property, built in 1910, was noted as ‘significantly dated throughout’; repairs and general maintenance had been neglected for several years and a substantial amount of work was required to modernise the property.

Taking into account the potential of the property once converted into a high-yielding HMO, Shawbrook was able to offer a £261,000 interest-only heavy refurb bridging loan on a 9-month term at 75% loan-to-value (LTV).

Shawbrook added the arrangement fee on top of the max LTV, rather than deduct from the gross loan resulting in a higher net loan amount for the client.

The client secured the funds required to complete the purchase quickly and undertake the heavy refurbishment needed to transform the property.

The client secured the exit route to a term mortgage, enabling them to recover their deposit and the refurbishment funds spent, as the value had increased almost 40% from the purchase price.

The client said: “As a first step into acquiring an investment property the advice and process with Go Finance and Shawbrook Bank could not have been more professional…even during lockdown! Having the comfort of working with market specific funders is essential.”

Neil Moorhouse, managing director of Go Finance, said: “The process with Shawbrook from quotation to completion is extremely straight forward with market leading pricing which enables Go Finance to offer best in market products.

“Shawbrook are an extremely helpful Bank on all levels & offer great support to the intermediary marketplace.”

Gavin Seaholme, head of sales property at Shawbrook Bank, said: “Working with expert broker partners and delivering a good customer journey and outcome are key to providing bridging solutions.

“At Shawbrook we have an award-winning product offering with products that are aligned to our customers’ needs.

“Heavy refurbishment is a key product in this market as it offers customers the opportunity to maximise an assets potential”

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