Reimagining the future of cities and towns with bridging finance – Hope Capital

by: Gary Bailey, managing director of Hope Capital
  • 02/12/2021
  • 0
Reimagining the future of cities and towns with bridging finance – Hope Capital
Over the course of the last year, we have witnessed many developers and investors turning to bridging finance as a way to fund their investment plans.

 

The specialist finance market is well versed in complex scenarios and can deliver innovative solutions and flexibility to a diverse range of borrowers and their individual situations. 

In particular, the number of borrowers looking to convert commercial premises into residential property has grown considerably over the last few months, with many investors and developers eager to cash in on the opportunities that this offers. 

It’s highly likely this stems from the government relaxing planning laws earlier this year to make it easier for developers and investors to convert unused commercial buildings into housing in England. The deregulation now means developers and investors can convert a commercial property to housing without the need for a planning application which results in a much cheaper and simpler approval process.  

As a result, there has been an extraordinary take-up by developers and investors making the most of this opportunity. 

With the planning system being modernised, this new proposal has become a major factor in helping towns and cities adapt to the future and regenerate. 

 

Beyond the pandemic 

In addition, the Covid-19 pandemic, coupled with many commercial businesses shifting to being online orientated has also been a game changer. There were many sectors which were and continue to be affected by the pandemic, however hospitality, retail and small businesses have been particularly hit hard.

Owing to the various lockdowns which have taken place, as well as many people now working from home, town and city centres previously vibrant and full of life have seen a dramatic reduction in footfall. Subsequently, this has hugely impacted businesses in these locations.  

As a result, many argue one way of reviving the high street and bringing people back to big towns and cities post-Covid, is to convert the growing number of vacant commercial buildings into new homes. 

This will be key in providing options for the growing number of people, especially younger individuals, who are eager to find a property so they can enjoy the benefits of city living.

 

Attractive assets

 Typically, commercial properties are in a prime location and provide good access to amenities, such as workplaces, transportation links, entertainment venues, bars and restaurants, making them an attractive place to live. 

Furthermore, it is sometimes the case, especially in the current housing market, that commercial buildings are listed at an attractive price. Therefore, securing a good deal on a commercial building, which is situated in a desirable location and can be transformed into residential property, has the potential to help investors and developers achieve significant capital growth. 

In light of this, many bridging lenders now have loans available, which are tailored to meet this demand. 

The most important factor as an investor or developer who is looking to utilise a bridging loan for this is purpose, is to ensure they have successfully navigated their way through the ‘prior approval’ process beforehand. Once this has been achieved, a bridging loan can then be used to secure funding to enable the borrower to complete their development.  

Ultimately, converting a commercial property for residential usage is becoming increasingly common and is showing no signs of slowing down. 

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