Arc & Co has arranged a new €7.7m (£6.85m) bringing loan with Topland Group for the refinancing of a portfolio of nine residential, units in Hull and the acquisition of a further 39 properties in the same building by a private client. The loan has been arranged on a nine-month term, with low early repayment charges, at a new loan-to-value ratio of 64% and a pricing margin of 5.5%.
The bridging finance solution was reached following the pre-Christmas withdrawal from the market of a number of buy-to-let lenders due to temporary uncertainty. With the client looking to refinance nine units and acquire additional properties, the best approach was to do so through bridging finance for a short period before looking to access a more orthodox long-term facility when the lending market stabilises.
Recent uncertainty has seen buy-to-let lenders impose stricter stress testing and increased ICR covenants across the board, reducing the leverage traditional providers are happy to provide. It is anticipated that a period of certainty in the market will see those conditions relaxed slightly in the coming months.
Tom Savill, asset finance adviser at Arc & Co., said: “The changes in the buy-to-let lending market made this a challenging refinancing and acquisition process, but by working with the client we identified the best solution for this situation. Bridging finance – especially on the terms provided by Topland, with low early repayment charges – offered an approach that meant the client could achieve its aims while providing the flexibility to take advantage of more preferential long-term finance as and when the market allows.”
Anish Vora, structured finance manager at Topland Group, added: “We are delighted to provide another competitive funding solution to an existing client. Our structured finance team can fund across the capital stack and look forward to supporting real estate investors and developers in 2023. Thank you to Arc & Co., Knight Frank and Osborne Clarke for their support on this transaction."