Bridging Finance for a Holiday Let Purchase: Completed in 28 Days
Bridging finance for a holiday let purchase was the only route forward for our client. The property located in Kendal, on the edge of the Lake District. Our client already owned a buy-to-let portfolio and wanted to diversify into holiday lets. However, the property wasn’t mortgageable because of the renovation work required. We have advised this returning client for several years now. They approached us directly, trusting our lender relationships and technical expertise.
Why Bridging Finance for a Holiday Let Purchase Was Needed
Because of this, the property required extensive work before operating as a holiday let. It needed a full rewire and a new heating system throughout. Every window and every internal and external door needed replacing. The floor layout also needed reconfiguring to suit modern short-term guests. A new kitchen and bathroom were essential, along with full redecoration. New flooring was needed in every room, from hallway to bedrooms. Without this work, the property could not be listed on Airbnb or similar platforms. This is exactly why the client needed bridging finance for a holiday let purchase. The deposit covered the purchase, but not the refurbishment costs.
Structuring Bridging Finance for a Holiday Let Purchase Under Time Pressure
The property was going through an auction process, which added real time pressure. The auction house agreed to withdraw it if we completed within 28 days. RICS guidance on property auctions highlights speed and certainty as key benefits. We approached a number of bridging lenders to discuss the case. One lender agreed to fund the entire refurbishment, up to 100 per cent. Funds were released in three tranches as each stage of work finished. The loan was secured against the target property in Kendal. In addition, a second, comfort charge was also placed on the client’s home. The purchase was structured through the client’s own limited company. This kind of structuring is central to bridging finance for a holiday let purchase.
Planning the Exit From Bridging Finance
Every bridging loan case needs a clear and credible exit strategy. We researched this fully before the bridging facility even completed. The agreed exit was a remortgage onto a Ltd Company holiday let mortgage. We gathered rental projections from several local holiday let agents. These covered low, medium and high season rental income figures. Projected rental income comfortably exceeded the lender’s affordability requirements for the mortgage. As a result, we secured an agreement in principle before completion. This gave the client real confidence in the bridging loan’s exit.
Meeting the 28-Day Deadline
Twenty-eight days is a tight deadline for any bridging loan case. We worked closely with the lender to agree the funding structure early. Proactive solicitors on both sides kept the legal work moving quickly. As a result, the case completed inside the auction house’s 28-day deadline. The property was saved from going back under the hammer at auction.
The Refurbishment: Work Underway, Funded in Tranches
The refurbishment is progressing well, funded by the tranche releases. Each tranche is released once the previous stage of work completes. Once finished, the property will operate as a fully furnished holiday let. It will then be marketed through Airbnb and similar booking platforms. The client’s buy-to-let portfolio will then include a genuine holiday let.
Need Bridging Finance for a Holiday Let Purchase?
This case shows why lender relationships and technical knowledge matter so much. Where other brokers say no, our experience often finds a workable structure. If you need bridging finance for a holiday let purchase, we can help. Our bridging loans service supports investors purchasing unmortgageable or unusual properties. Get in touch to discuss your own refurbishment or auction purchase today.
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