I recently helped a client to secure a £4.2 million bridging loan against farms in Scotland and land in England that didn’t have any planning permission.
This client approached the Enness Bridging team after receiving terms from a different broker which he was not happy with – at 2% in, 2% per month and then a further 2% out. His existing lender was happy to reduce the current debt by £1 million if new terms were sourced, but this was not quite good enough.
Firstly, there is a very limited amount of lenders willing to lend on property in Scotland – let alone farm land – with a similar situation applying to agricultural land in England, with only three lenders across the market actually producing any terms for my client.
Securing finance against land and agricultural property can be difficult, largely because it is tricky to value and determine the purpose of the land. So to do so without planning permission can be near impossible.
On top of this, my client was three weeks away from receiving planning permission on the land in England, which was to be used to build 200 residential units. Property developers had already offered to buy the land, yet only at a reduced price because the planning permission was yet to be approved. However, once granted, the land value would increase hugely from £3 million to £10 million, making my client in desperate need for the refinance.
Against all odds, we had managed to source finance priced at just 2% in, 1.5% per month and only one month’s interest upon exit. I sourced this within just four hours and also managed to increase the term from six months to 12 months, allowing my client the time to finalise planning and sell on to a property developer once the value had increased.