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Navigating legal and financial challenges in property conversions – especially those involving listed buildings – requires a high level of expertise.
When an experienced developer and portfolio landlord needed to refinance a recently completed semi-commercial property, Merryoaks Property Finance introduced Redwood Bank to the opportunity. This marked the beginning of a fruitful relationship between the broker and the lender.
An established property developer, with a portfolio valued at over £10 million across multiple corporate companies, needed £798,000 net to repay an investor. The asset was a semi-commercial property in Hereford, comprising 10 residential flats and one commercial unit.
The developer had converted the vacant upper floors of a high street building into the 10 flats, while retaining a small commercial unit on the ground floor. The building itself is a distinguished Grade II listed structure.
The funding was sought via an intercompany transaction, with the deposit structured as an intercompany loan. The borrower’s financial strategy was to use a selected panel of lenders to help meet their funding needs. As a result, Redwood brought specialist lending skills into this panel.
A valuation, arranged via VAS Valuation Group with Eddisons, estimated the rental income of the flats at £85,800 per year, with the commercial unit valued at £8,000 per year. Each flat comes with its own electricity, water and fibre internet and all are covered by a 10-year build warranty with BuildZone.
Redwood stepped in with a flexible and responsive approach that provided certainty – critical to the successful outcome of the deal.
The bank approved a loan of £798,000 with a 2 per cent fee on a 10-year interest-only term, with a five-year fixed rate of 6.49 per cent. The loan will then roll into a 20-year capital and interest repayment, making up a 30-year total term.
Due to the property’s EPC rating, the client qualified for a Green Cashback Reward, which was paid on completion.
The deal also required navigating the complexities of an intercompany transaction whereby the asset was sold to the client’s investment entity. The support of Feldon Dunsmore Solicitors here was crucial. They acted on a dual representation basis and navigated the deal through to completion smoothly.
Hannah Varley, Credit Operations Officer at Redwood, also worked closely with solicitors to ensure a smooth and timely completion, which played a key role in the speed of the deal’s completion.
Mark Dobson, Head of Business Development (South and London), said: “This was a complex case involving multiple layers – intercompany lending, a listed building and the need for a fast turnaround. Not every bank would take on a structure like this – but Redwood Bank did, and we will continue to support brokers and clients with bespoke, flexible lending solutions.
“We worked under tight timelines, but the collaboration between Redwood, Merryoaks, the client and the solicitors involved was seamless. This deal is a testament to the strong relationship now built between Redwood and Merryoaks. I’m incredibly proud of the team who ensured a smooth completion under significant pressure.”
George Melling, Head of Bridging & Commercial at Merryoaks Property Finance, said
This deal was a fantastic example of what can be achieved when everyone pulls in the same direction. Our long-standing client had nothing but praise for both Merryoaks and Redwood upon completion.
Redwood’s willingness to understand the client’s structure, their pragmatic approach, and their speed of execution made all the difference. It’s been a real pleasure working with a lender that genuinely values relationships and results. With their outstanding legal team also involved, this marks signs of a strong and lasting partnership.