Commercial & Residential Refurbishment

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Our clients are experienced property developers and purchased a commercial building using a development finance facility to allow them to refurbish the retail units and create residential units above. The property, located in Surrey, comprised of two shops and 14 flats which were to be let out.

As interest was being added to the development loan on a monthly basis, the funding facility needed to be repaid quickly to avoid increased costs.

Given the desirable location of the property and the quality of the development, both the retail shops and the flats were in high demand. This was great for our clients as it gave them the confidence that any potential future rental voids would be kept to a minimum.

Finance Terms

A commercial investment mortgage was required to repay the development loan. Our clients were very rate conscious and, of course, speed was crucial to the deal.

After a discussing the client’s needs and preferences we had a good idea of who would be the best lender for them but to make double sure we were going down the right track, the enquiry was discussed with several lenders to ensure the timescales were feasible.

It was discovered that the clients had a small banking facility with the chosen lender therefore the lender could see a good track record which helped when the application was underwritten.

  • Loan Amount – £1,500,000
  • Valuation – £3,680,000
  • Rate – 2.55% over base
  • Term – 5 years
  • Monthly Payment – £5,905.00
  • Repayment Method – Part & Part
  • Lender Arrangement Fee – 1.5%


The clients were nearing the end of the development finance term and heading for an expensive default interest rate therefore speed was a necessity. When the application was submitted there were no signed leases for the retail shops as negotiations with potential tenants were still ongoing.

Also, only six of the 14 flats were let out with the remaining flats only recently advertised with a letting agent, therefore any interest in them from prospective tenants was in the early stages. We managed to obtain a mortgage offer, subject to valuation and tenancy agreement and leases, in 13 business days which was enough to keep the development finance lender happy and the client’s conveyancer could get this moving.


About The Author

This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.

Gary Hemming CeMAP CeFA CeRGI CSP  -  
Commercial Lending Director

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