Unlocking Property Potential Through Strategic Refinancing
In the world of property development, strategic refinancing can be the key 🔑 to unlocking the full potential of a project. This case study highlights how one foreign investor successfully transformed an HMO (House in Multiple Occupation) into four high-quality residential flats 🏡 by leveraging bridging finance at the critical final stage of the build.
HMO-to-Residential Conversion: A Case Study
Project Overview
Originally purchased in 2015 for £750,000 as an HMO without planning permission, the investor successfully navigated the planning process and operated the property as an HMO for eight years. With a Gross Development Value (GDV) of £2.4 million 💷, the conversion into four self-contained residential flats offered a significant uplift in value compared to its previous use as an HMO.
When the time came to sell, the client secured approval for redevelopment, showcasing the power of strategic planning and property development finance.
The Role of Bridging Finance in Property Development
Funding Requirements and Progress
To bring the project to completion, the investor initially refinanced an existing property. However, as the project neared its final stages, they sought a £450,000 net bridging loan to finalise the remaining works.
By this point, all major construction was complete, including the first fix of electrics and plumbing 🔧. The funds were required for the second fix and other finishing touches, such as flooring, painting, and final inspections.
Competitive Bridging Loan Solutions
The borrower received multiple offers from bridging lenders, with interest rates ranging from 1.05% to 1.15% per month. This was due to the lack of building control sign-off for some works. However, with a low Loan-to-Value (LTV) ratio, we were able to offer a highly competitive rate of 0.99% per month, with no exit fees or early redemption charges.
This cost-effective and flexible solution allowed the investor to complete the project without unnecessary financial strain.
Realising a Strong Investment Through Strategic Planning
This case study demonstrates how careful planning, strategic refinancing, and diligent execution can unlock significant property value. By securing the necessary funds at the final stage, the investor was able to:
Save on financing costs
Maximise the Gross Development Value (GDV)
Successfully complete the residential development 📈
Why Bridging Finance is Ideal for Property Development
For property investors and developers, bridging finance offers a flexible and efficient way to fund projects, especially during critical stages like:
HMO-to-residential conversions
Redevelopment projects
Final-stage construction
With the right financing partner, you can unlock the full potential of your property and achieve your investment goals.
Ready to Unlock Your Property’s Potential?
If you’re considering a property development project or need tailored refinancing solutions, get in touch today. At Aura Capital, we specialise in providing bridging finance, development exit finance, HMO Bridging Finance and strategic refinancing to help you achieve your goals.
📞 Contact us now to explore how we can support your next project!
