Bridging – no planning permission
No commercial, or residential lenders, will lend on properties that require a change of use, or planning permission before the property can be used for its intended purpose. The change of use and/or the planning permission must be in place first.
However, this is not so with bridging lenders. They will lend purely on the property itself and what their valuer tells them it’s worth. This enables borrowers to buy the property, then apply and obtain the necessary change of use and/or planning permission, before refinancing to a residential, or commercial lender. In most cases this can be done within 3 to 6 months.
Here are a few typical circumstances where a bridging loan is the answer:
• An applicant wants to buy a former shop with living accommodation above and convert it for his/her main residential use. The property has existing A1 commercial use, so no residential lender will lend on it. The shop has been closed down and the applicant does not intend to run it as a shop, so no commercial lender will lend on it. • A developer wants to buy a former Care Home and convert it into flats. The property has existing C2 use and it needs change of use and planning permission. No development lenders will lend until these are in place. • A couple want to buy a terraced house in a small town and turn it into a café with a flat above for them to live in. The property has existing C3 use and needs change of use to A3 before a lender will agree a mortgage.
Bridging loans are quick and easy to arrange. They are ideal for all the above circumstances and more.