TAB has provided a £335,000 bridging loan to an experienced landlord who needed to release equity from an unencumbered London buy-to-let property to meet a court-ordered financial liability.
The 24-month first-charge facility was secured against a £1 million property in Dollis Hill, giving a loan-to-value ratio of 33.5%.
The borrower owns eight rental properties and used most of the advance to settle a confiscation order arising from an unsuccessful appeal involving a separate property in the London Borough of Barnet.
The enforcement action related to the previous use of that property as three self-contained flats. It has since been returned to use as a single residence.
LOW-LTV SECURITY
The Dollis Hill property used as security for TAB’s loan was unencumbered, allowing the lender to take a first legal charge without requiring the borrower to refinance the asset onto longer-term funding immediately.
After settling the liability, the borrower was left with net proceeds of £47,000 to help fund maintenance across the wider buy-to-let portfolio.
TAB says the 24-month term gives the borrower time to manage the portfolio and arrange a longer-term refinance exit, with the remaining equity in the security property supporting that strategy.
The case was underwritten by senior underwriter Justice Marima.
Calum Knight (pictured), TAB’s business development manager for south-eastern England, says: “This is a great example of how a bridging loan can provide a borrower with access to capital held in an unencumbered property when they need to resolve a time-sensitive financial liability.
“The property provided substantial security for the £335,000 bridge, with the resulting 33.5% LTV giving us a strong lending position. The 24-month term also gives the borrower the time and flexibility needed to manage the wider portfolio and refinance. And, of course, the breach was unrelated to our security property.
“This deal demonstrates TAB’s ability to provide bridging finance against substantial residential assets where borrowers need to release equity to address specific financial requirements. Think TAB, think bridging.”
Robert Hershaw, founder and managing director of Active Investments, who introduced the loan, says: “Our client needed to raise capital against an existing buy-to-let property to settle a court-ordered liability, while retaining enough funds to continue managing their wider portfolio.
“TAB was able to structure the facility against the £1m property at a low LTV, providing the capital required to resolve the immediate issue while leaving the client with £47,000 in net funds.
“The 24-month term also provides useful flexibility while they arrange the longer-term refinance. Once again, TAB has brought momentum to lending.”
