United Trust Bank (UTB) has completed a £345,000 second charge regulated bridging loan to help homeowners acquire and improve a holiday let investment in a popular coastal town in the south west.

The loan enabled the customers to purchase a £312,000 property and fund subsequent improvement works. Once refurbished, the property will be used as a holiday let, with the borrowers planning to refinance once the renovation is complete.

After discussing options with their broker, the borrowers chose to raise the required funds against their main residence, which was valued at £1.6m with a first charge mortgage of around £210,000. The substantial equity allowed for a second charge facility that could be arranged swiftly – a key requirement given the timeframe of the purchase.

Two exit strategies were outlined. The preferred option is to refinance the investment property at an estimated value of £410,000 via a holiday let mortgage, which would repay the bridging loan and reimburse some of the upfront costs. As a secondary plan, the borrowers could refinance their main residence, supported by their joint income.

Craig Taylor, key account manager – bridging at United Trust Bank, said: “Homeowners often have substantial equity in their main residences, even if they have first charge mortgages already secured on them.

“Releasing this equity with a second charge regulated bridging loan can provide customers with a quick and straightforward solution to raising money quickly for a variety of purposes, including purchasing properties not in a suitable condition to use as security for a bridging loan or mortgage.

“Although not all lenders are happy to offer second charge bridging loans, regulated or unregulated, at UTB we have an experienced team of underwriters and credit professionals committed to helping brokers and their customers secure the right solution for their needs and to seize opportunities when they arise.”