Bridging Loan Secured Against Unique New Build In Chichester

Can you get a mortgage for a new build that you’re leasing back to the property developers as their sales office until the project completes?  

What about securing a bridging loan against it? 

Read our unique case study to find out.

The Scenario 

Our client had recently purchased a 5-bedroom detached new build in Chichester, valued at £630k.  

But having bought it outright with cash thanks to having reserves left over from separating from her partner, she now wanted to jump on an investment property she’d identified as a great opportunity. 

However, she didn’t have cash to make the purchase, or even fund the deposit for a buy-to-let mortgage. 

So, she approached her mortgage broker to refinance her new build property, ideally freeing up enough cash to fund the investment property purchase.

But she was rejected for a mortgage. 

Why? 

What sets this case apart is that the new build home she’d purchased was still serving as the sales office for the development company. It’s common practice for new build development projects to occupy one of the houses as the sales office until all the other properties have sold. 

Our client was leasing the property back to the developers until it was ready for her to move in – but this meant it wasn’t eligible for a residential mortgage. It was technically classed as a commercial entity and didn’t have the new build warranty signoffs yet from the development company.  

The Solution 

We stepped in to provide a bridging loan to purchase the investment property, to be repaid when the mortgage on the new build could go through. 

• £160k bridging loan 
• Secured against the clients’ new build property 
• Fully covered the cost of the investment property and some refurbishments she intended to carry out. 

Bridging loans are generally more flexible than standard mortgages, so securing one against the new build - despite the commercial aspect and lack of new build warranty - was something we could negotiate on with the lender. 

When the new build was eventually signed off and the lease to the developers had stopped, the client could easily remortgage the property and repay the loan in good time, knowing she’d capitalised on a great investment opportunity in the meantime. 

Taking Action Quickly 

In the world of property finance, particularly when it comes to sought-after investment properties coming to the market, speed and flexibility is undeniably important.  

In this transaction, the lender's flexibility played a crucial role in speeding up the bridging loan process for our client: 

They agreed to an online valuation that can be carried out almost instantly (and at a much lower cost).  

And the use of in-house legal services (employing the same solicitors as the bank) greatly streamlined the legal process, meaning we could complete the entire procedure for our client in just a few days. 

This meant our client could capitalise on a unique investment opportunity, where she’d otherwise lose out.