Hope Capital Property Finance supports Welsh HMO conversion with Flip+ facility
The case was introduced by Lyndsay Kent of TBK Mortgage Studio on behalf of a developer purchasing a three-bedroom mid-terraced property for £85,000.
Hope Capital Property Finance has supported the purchase and refurbishment of a Welsh property being converted into a four-bedroom house in multiple occupation (HMO) through its Flip+ proposition.
The case was introduced by Lyndsay Kent of TBK Mortgage Studio on behalf of a developer purchasing a three-bedroom mid-terraced property for £85,000.
The borrower planned to convert the property into a four-bedroom HMO, but needed to secure the property while progressing through the planning process, as HMO conversions in Wales fall outside permitted development rights.
Hope Capital initially provided a purchase-only bridging facility, before refinancing the borrower onto a 75% loan-to-value (LTV) refurbishment facility at a rate of 0.89% three months later.
A further £52,000 was provided to fund the refurbishment, with tranches released on the same day the lender received the monitoring agent’s report.
An 18-month term was available, although the borrower opted for a 12-month term to complete the works.
A desktop valuation supported the initial purchase facility, followed by a full valuation once planning was in place for the refurbishment to begin.
Dual legal representation was used across both facilities alongside full title insurance, while the borrower paid an uplift fee on the additional refurbishment funding rather than a full new facility fee.
Kent said: “From the outset, I wanted to be sure I could make this deal work for my borrower, which meant sourcing a lender that could keep costs down throughout.
“Despite the complexity, Hope Capital Property Finance stayed relentless in finding a solution throughout and made what could have been a very difficult case easy for my borrower.”
Sam Lea (pictured), national account manager at Hope Capital Property Finance, said: “This was a great example of a case where the funding needed to work around the different stages of the borrower’s project.
“They needed to secure the property first, while also having a clear route into refurbishment funding when they were ready to progress.
“Flip+ gave us the flexibility to support both stages, while keeping the borrower with Hope Capital Property Finance throughout.
“By working closely with Lyndsay and our underwriting team, we were able to structure a solution that reduced the cost and complexity of moving from the initial purchase bridge onto the refurbishment facility.”
Stacey Bradwell, underwriter at Hope Capital Property Finance, added: “Having underwritten the initial purchase facility, I already had a clear understanding of the case when the borrower was ready to refinance onto the refurbishment facility.
“That continuity helped make the transition between the two facilities more efficient and is a great example of how closely our sales and underwriting teams work together.”
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