Shawbrook has provided a short-term loan and £4 million Customer Appetite Statement to help investors convert a rundown property in Southend, Essex into a high end six bedroom HMO.

The two clients were friends who had met some of the Advocate Finance team at a property event several years before. The two partners have since invested in 16 properties together, five through Shawbrook.

Shawbrook provided a £185,000 short-term heavy refurb loan at 75% LTV to help the investors purchase and convert the property. The specialist lender then refinanced the property with a 0% arrangement fee using an investment valuation onto an interest only mortgage at a monthly fixed rate of 4.69%.

During the first meeting to discuss the opportunity, Shawbrook supplied the investors with a Customer Appetite Statement, a representation of the lenders’ appetite to consider new applications, of up to £4 million.

This figure was determined after Shawbrook discussed the investors plans to continue converting rundown properties into high end HMO’s in Southend and other areas across the UK where they saw value. This large facility was agreed due to the proven experience of the investors and their past successes, and was also helped by the two investors having used Shawbrook before for property purchases and conversions.

The investors were able to successfully purchase the property and completed the refurbishment within their predicted time frame, increasing the property’s market value by approximately £200,000 and increased the gross market rent to over £46,000.

Emma Cox, sales director at Shawbrook Bank, said: “We are delighted that Shawbrook and Advocate Finance worked together to provide an excellent service to these two property investors to help them grow their impressive property portfolio.

“This case also provides a great example of our Customer Appetite Statement in action and we look forward to it helping many more clients in the future.”

David Tonks, director at Advocate Finance, added: “Shawbrook Bank have been a brilliant partner allowing these clients to take run down properties and turn them into some of the most impressive HMOs you will find in the UK.

“The short term loan facility allows the initial funding on the run down properties and once the works are complete the process to switch to a buy-to-let mortgage is quick and cost effective because there are no arrangement fees.

“The use of title insurance at the legal stage also allow funds to be raised in a matter of days after mortgage offer rather than the usual legal process that can take 4-8 weeks with other lenders.”