Our client contacted us to raise the funds that they required to purchase a flat in London. The flat was in a Victorian property that had previously been converted from a single house into 2 flats. Many properties in the street had been converted into flats over the years, resulting in very strong values for properties that were still single dwelling houses.
This flat was particularly desirable to our client because they already owned the other flat in the building. Acquiring the flat would enable them to convert the property back into a house, resulting in a significant increase in the value of this property.
Furthermore our client required a facility that would provide the funds required to carry out the conversion work once the necessary planning permission had been obtained, plus repay the buy to let mortgage facility just before commencement of the building work.
Our client had a buy to let mortgage (making use of approximately 75% of the equity) secured on the downstairs flat that he already owned, and required us to raise a facility to cover the full purchase price of the upstairs flat plus the stamp duty. We also had to have the facility in place quickly, as a quick completion had been agreed as a condition of sale.
Furthermore we also had to be able to provide the funds required to pay for the conversion work and pay off the buy to let mortgage before work could commence.
Once the property had been converted back into a house our client intended to sell it.
We used a lender who raised all of the required funds. They initially took a first charge on the flat being purchased and a second charge behind the buy to let mortgage on the flat already owned. They also agreed to increase the facility once the necessary planning permission had been obtained.
The increased facility would be used to repay the buy to let lender and also provide the required funds to pay for the conversion work. The lender fully appreciated the potential value in the property once converted back into a single home.
For speed the lender agreed to do this without obtaining second charge consent before draw down and also carried out a drive by valuation.
The second part of the facility that would provide additional funds to repay the buy to let mortgage and also fund the conversion was put in place to be drawn upon later. The reason for this was to allow the client to take advantage of the lower interest rate that they had on their buy to let mortgage facility whilst they sorted out the necessary planning permission.
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What the client had to say
When the upstairs flat came on the market I just knew that I had to buy it due to the potential profit, but I didn’t know how I could find the funds to do this. I found KIS online and gave them a call. After a 20 minute of so chat with Neil, they came up with a very attractive solution. They also thought of things that I had completely overlooked, such as what my buy to let mortgage provider would have to say about our plans.
I was very impressed at the service KIS provided. I always had complete confidence in them which was not misplaced as they delivered and achieved what I initially thought to be impossible.