Client Scenario
Our client sought to purchase a mixed-use freehold property comprising a ground-floor fish and chip takeaway business and a three-bedroom flat above. The property was held under a single title, and the client’s objective was to acquire the entire property, then split the title to separate the commercial and residential elements.
The purchase price was £295,000, funded by £120,000 of personal savings and a bridging loan for the remaining £175,000.
The Challenge
The transaction presented several funding challenges:
- The property was mixed-use (commercial and residential under one title).
- The client planned to split the title after completion, making it unsuitable for standard mortgage lending.
- The purchase had to complete quickly to secure the opportunity.
The client therefore required a un-regulated bridging loan that would provide the full purchase balance, roll up interest for the duration, and offer time to complete the title split and refinance arrangements.
The Solution
A 12-month non-regulated bridging facility was arranged on an interest roll-up basis, meaning no monthly payments were required during the term.
This solution allowed the client to:
- Complete the purchase swiftly and secure the property.
- Undertake the legal process of splitting the title into separate commercial and residential units.
- Plan the refinance on suitable long-term facilities for each element.
Exit Strategy
Following the title split, the client will refinance both elements of the property separately:
- Commercial Refinance (Ground Floor Takeaway & Freehold)
- Estimated Value: £220,000
- Refinance at: 85% LTV (£187,000)
- Term: 20-year commercial loan
- Estimated Monthly Cost: £895
- Residential Refinance (Upstairs Flat)
- Estimated Value: £150,000
- Refinance at: 75% LTV (£112,500)
- Product: Buy-to-Let mortgage
- Estimated Monthly Cost: £468
Unsure about exit strategies, our recent blog can help.
Outcome
Once both refinances are complete, the client will be able to repay the bridging facility in full, reimburse a significant portion of the £120,000 personal funds invested, and retain ownership of two profitable, income-generating assets.
The combined strategy ensures:
- Strong capital recycling, freeing up funds for future investments.
- Ongoing rental and business income from both properties.
- A healthy long-term profit from the uplift in value created by separating and refinancing the assets.
Key Details
| Feature | Description |
| Purchase Price | £295,000 |
| Client Deposit | £120,000 personal funds |
| Loan Type | Non-Regulated Bridging Loan |
| Loan Amount | £175,000 |
| Loan Term | 12 months |
| Repayment Basis | Interest Roll-Up |
| Purpose | Purchase of mixed-use property and title split |
| Security | Ground-floor takeaway and three-bedroom flat |
| Commercial Refinance | £220,000 value, 85% LTV, £895 p/m |
| Residential Refinance | £150,000 value, 75% LTV, £468 p/m |
| Outcome | Successful purchase and title split; client recoups most of initial capital and generates long-term profit through both ventures |
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