United Trust Bank (UTB) has completed a £345,000 second charge regulated bridging loan to help customers purchase and improve a holiday let property in a south-west coastal town.
The property, valued at £312,000, required additional investment for improvement works before being marketed as a holiday rental. The customers opted to secure the bridging loan against their main residence, which was valued at £1.6m with an existing mortgage of around £210,000, allowing sufficient equity to fund the deal swiftly.
Two potential exit strategies were considered. The primary plan involves refinancing the holiday let on a holiday let mortgage once the renovations are complete, with an expected value of £410,000. The alternative is to refinance the existing first charge mortgage on the borrowers’ main home, with UTB confident that the applicants’ joint income could support this option if needed.
Craig Taylor, key account manager – bridging at United Trust Bank, said: “Homeowners often have substantial equity in their main residences, even if they have first charge mortgages already secured on them. Releasing this equity with a second charge regulated bridging loan can provide customers with a quick and straightforward solution to raising money quickly for a variety of purposes, including purchasing properties not in a suitable condition to use as security for a bridging loan or mortgage.”
Taylor added: “Although not all lenders are happy to offer second charge bridging loans, regulated or unregulated, at UTB we have an experienced team of underwriters and credit professionals committed to helping brokers and their customers secure the right solution for their needs and to seize opportunities when they arise.”
