Financing the Conversion of a Grade II Listed Building – Development Finance

At VIBE, we take pride in helping our clients achieve their property investment goals, no matter how complex. Recently, we assisted experienced clients in purchasing and converting a Grade II listed building into seven self-contained flats. This case study explores the challenges faced, the solutions we provided, and the successful results of this project.

The Challenge:

Our clients aimed to purchase a three-storey mid-terrace Grade II listed building with full planning permission for conversion. The property, valued at £1 million, required significant refurbishment to transform it into seven self-contained flats. The primary challenge was securing the necessary funding for both the purchase and the extensive renovation works, especially given the historical significance and the specific regulations tied to the Grade II listing.

The Solution:

VIBE structured a comprehensive financial solution tailored to the unique requirements of this project. The financing package included:

  • Day 1 Loan: We secured an initial loan of £706,068, allowing our clients to cover a substantial portion of the purchase price.
  • Refurbishment Funding: An additional £493,700 was allocated for the refurbishment, ensuring that the project could proceed without financial constraints.
  • Total Gross Facility: The total financing provided amounted to £1,316,000, covering both the acquisition and the renovation costs.
  • Valuation and Loan-to-Value (LTV): The day 1 open market value (OMV) of the property was assessed at £944,151, with a 75% LTV. Post-renovation, the gross development value (GDV) was projected at £1.880 million, resulting in a loan-to-GDV (LTGDV) ratio of 70%.
  • Term and Exit Strategy: The loan was structured over a 12-month term, with the planned exit strategy being the sale of the completed flats.

The Results:

The structured financing enabled our clients to successfully acquire and refurbish the Grade II listed building. Key outcomes included:

  • Successful Acquisition: The initial loan facilitated the purchase, allowing the project to commence promptly.
  • Comprehensive Refurbishment: The allocated refurbishment funds ensured that the building was converted to a high standard, adhering to the regulations for listed buildings.
  • Enhanced Property Value: Post-renovation, the property’s value increased significantly, aligning with the projected GDV of £1.880 million.
  • Smooth Exit: The sale of the newly created flats provided a profitable exit for the clients, fulfilling their investment goals within the 12-month term.

In Review:

This case study highlights VIBE’s expertise in structuring tailored financial solutions for complex property projects. By understanding our clients’ needs and the unique challenges of converting a Grade II listed building, we provided a robust financing package that facilitated a successful project from start to finish. At VIBE, we are committed to helping our clients realise their property ambitions, no matter how intricate or demanding.

If you have a unique property project and need expert financial guidance, contact us today to see how we can assist you in achieving your goals.

Further Reading and Resources:

Please feel free to check out our Case Studies for intermediaries here and for consumers here.

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Disclaimers:

VIBE Mortgages Ltd T/A VIBE Mortgages & Protection (Financial Conduct Authority number 966737) is an Appointed Representative of Complete FS Limited which is Authorised and Regulated by the Financial Conduct Authority number 73812.

VIBE Finance is a trading name of VIBE Financial Services Limited. VIBE Financial Services Limited is registered in England and Wales No. 10979822. Registered office: VIBE Financial Services Limited, H4 Daedalus Park, Daedalus Drive, Lee on the Solent, PO13 9FX.

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