Case Study: £1.2m Second Charge Bridge Enables Home Completion and Property Investment Strategy

Aria Finance secured a £1.2 million regulated second charge bridging loan at 67.5% LTV for a client who needed to complete their partially finished home while also releasing funds to purchase investment properties. With a high-value second charge loan and a requirement for flexible drawdown, the case required access to a specialist lender with the right combination of LTV, structure and flexibility.

Introduction:

• £1.2m regulated second charge bridging loan

• 67.5% LTV against a £2.5m property

• 12-month facility

• 14 days from application to completion

• Funds released initially for works to the client’s home, with further funds available for future investment purchases

• Flexible drawdown structure helped avoid paying interest on funds before they were needed

The Client:

The client works in the construction industry and had spent several years building a substantial new home. Although the property was worth approximately £2.5 million, it remained partially finished after the clients ran out of funds to complete the works.

They planned to finish the property before eventually selling it and downsizing. At the same time, they were looking to build their property portfolio and had a plan to purchase three investment properties when suitable opportunities became available.

The Situation:

The clients wanted approximately £900,000 available to fund future investment purchases, giving them the ability to act quickly when suitable properties came to market.

They had previously made offers on investment properties but had struggled to secure them because they were not yet in a proceedable position. Having the funds available in advance would put them in a much stronger position to negotiate and make offers.

The challenge was that the investment properties had not yet been identified. Drawing the full facility from day one would have meant the clients paying interest on funds they did not immediately need.

The case was also particularly challenging from a lending perspective. Only a limited number of lenders offer second charge bridging loans above 65% LTV, and the £1.2 million loan size further reduced the available lender pool.

Several alternative lenders were unable to provide the required flexible drawdown facility. Instead, they would have required charges to be placed against the onward investment purchases. As these properties had not yet been identified, this structure would have delayed access to the funds and, importantly, could have delayed the completion works on the client’s home.

Our Solution:

Aria Finance identified a lender able to accommodate the client's requirements through a £1.2 million regulated second charge bridging facility at 67.5% LTV, secured against the £2.5 million property.

A key part of the solution was negotiating a partial day-one drawdown. This meant the clients could access the funds they needed immediately to continue work on their home without drawing the entire facility.

The remaining funds could then be drawn down as suitable investment properties were identified and agreed. This gave the clients the financial strength to make offers while avoiding the unnecessary cost of paying interest on funds they had not yet used.

The lender also offered dual representation on the legal work. Aria recommended a solicitor from its established panel with experience of working on similar transactions, helping to keep the legal process moving efficiently.

Despite the complexity of the transaction and the size of the facility, the case progressed from application to completion in just 14 days.

Benefits & Results: 

Aria Finance’s specialist knowledge was central to getting the deal over the line. With only a small number of lenders prepared to offer second charge bridging finance above 65% LTV, and even fewer able to accommodate a £1.2 million facility, identifying the right lender and structuring the application correctly was particularly important.

Aria also recognised that drawing the full facility from day one would not be the most cost-effective solution for the clients. We negotiated a partial initial drawdown with the lender, allowing the clients to access the funds needed to continue work on their home while keeping the remaining funds available for future investment purchases. This meant they could avoid paying interest on capital before it was required.

The team also helped keep the legal process moving by recommending an experienced solicitor from Aria’s established panel after the lender confirmed that dual representation was possible. This helped ensure the transaction progressed efficiently despite the complexity of the facility.

The result was a flexible £1.2 million regulated second charge bridging loan completed in just 14 days. The clients could continue work on their home immediately while retaining the ability to access further funds when suitable investment opportunities arose, putting them in a much stronger position to act when the right properties became available.

The case highlights the value of using a specialist property finance broker when a transaction falls outside straightforward lending criteria. Aria’s lender relationships, understanding of complex second charge finance and ability to negotiate the right structure enabled the clients to achieve both their immediate funding requirements and wider investment objectives.