CASE STUDY
Overview
Bridging finance is a powerful tool for auction purchases. In this case, we supported a first-time landlord purchasing their first buy-to-let property at auction by securing a 75% LTV bridging loan, despite market volatility, a challenging valuation, as well as tight time constraints.
Our proactive involvement ensured the initial loan was honoured. The refurbishment was completed quickly, and the client exited via sale at a profit, thanks to the uplifted value and well-executed works.
Client Profile
- Client Type: First-time landlord, developer, and auction buyer
- Purchase Price: £272,500
- Initial Gross Loan: £204,375
- Initial LTV: 75%
- Loan Term: 6 months, retained interest
- Exit Route: Sale of refurbished property
Client’s Objectives
The client aimed to purchase a buy-to-let investment property at auction and carry out light to moderate refurbishment works (£25,000). Depending on final valuation and market conditions, the client intended to either refinance onto a long-term buy-to-let mortgage or exit the bridging loan with a sale.
The Challenge
Several layers of complexity had to be managed in a short time frame:
- The client was a first-time landlord and auction buyer, with no previous track record
- A valuer initially overestimated the refurbishment costs, proposing £60,000 instead of the client’s actual £25,000 plan
- Market volatility in early 2023 following the mini-budget triggered rate spikes and tightening criteria across lenders
- A 75% LTV bridging loan was sought at a time when many lenders were scaling back
Our Bridging Finance Solution
We moved swiftly to secure a six-month bridging finance facility at 71% LTV, despite prevailing uncertainty. When the valuer’s estimations threatened to derail the case, we collaborated directly with the lender to present a detailed rationale for the client’s costs.
The lender agreed to proceed based on the client’s experience and execution plan, overruling the initial assessment.
The client used personal funds to complete refurbishments, installing a new kitchen and bathroom, flooring, and repainting to add value to the property. By month two, all works were completed. A new valuation for the buy-to-let exit confirmed the uplifted value of £345,000.
Although a refinancing route was available (with a net loan offer of £237,032 at 71% LTV), the client opted for a sale, realising a capital gain.
Why Henry Dannell?
This case highlights the critical value of hands-on, broker-led support for first-time landlords. From mitigating valuation discrepancies to securing funding at the upper end of LTV ranges, we ensured the client’s goals remained achievable despite a challenging economic backdrop.
By navigating auction timelines, lender engagement, and exit strategy planning, we provided a clear roadmap from acquisition to profit realisation.
Client Feedback
“I completed on a property today and the team was great throughout the process. Everyone was really responsive which helped make things run smoothly. I’ve now used Henry Dannell for three mortgages and would highly recommend the team.”
This is a case study and not indicative of typical results. Past performance is not necessarily representative of future results. This information is for general purposes only and does not constitute financial advice. Please seek professional advice before making any financial decisions.
Please note: a bridging loan is a short-term loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any debt secured on it. The Financial Conduct Authority does not regulate some forms of bridging finance. Bridging finance / loan deals may not be available and lending is subject to individual circumstances and status.
