Bridging finance for new build while clients still live in their existing property



Regularly clients come to Enness looking to remortgage their primary residence in order to fund the building of a new one. At Enness we take a great deal of care to help clients make the process of moving home as smooth as possible, and we are experts at organising bridging finance to facilitate this.

A retiree couple came to me recently off the back of a recommendation from their friends who were impressed with my service. They were looking to begin building a second property on the grounds of their existing residence in Surrey. Planning permission had already been in place for some time and foundations were laid to keep the planning permission valid. The new build was expected to take 12 months and would likely be valued at £3million upon completion. Their primary residence was also valued at £3million and had no mortgage. The plan was for the couple to move into the new house upon completion, sell the former residence and split the title into two separate plots.

Because they would be moving into the new property following the sale of their old house, we would need to organise a bridging loan. However, the couple’s pension income wasn’t enough to cover the projected building costs of £1.35million.

As well as this, most bridging lenders will only offer a regulated first charge bridging facility for 12 months. This gave no leeway if the building project went over time and would mean that my clients would be faced with refinancing the bridging facility for another 12 months which would be incredibly expensive.


I knew exactly how to overcome these obstacles, as I have a strong relationship with a particular building society that has very flexible underwriting. This lender has a regulated bridging facility that can be rolled over for two years rather than 12 months that is reserved for high net worth clients.

It was possible for my clients to be offered this solution because their primary residence was unencumbered and they also owned a buy-to-let property which gave them equity of £350,000 which meant that they could be considered as High Net Worth. This meant that the lender in question was able to ignore the affordability stress testing that would prevent any other lender from offering this.

The lender was also happy to accept repayments of the bridging facility from the sale of their first property. My clients were able to fund the £1.35million build costs over three blocks of payment which saves significant interest. I managed to negotiate a rate of 5.99% annually (or 0.49% monthly) over a 2-year term where the interest is rolled up and added to the net borrowing of the build costs.

My clients were delighted with this result as it ensured a smooth process from build to move to sale. At Enness we put a great deal of emphasis on creating lasting relationships and I was very pleased to offer a great service after being personally recommended by the clients’ friends.