A London-based property investor has secured a £335,000 bridging loan against an unencumbered buy-to-let property in Dollis Hill to meet a court-ordered liability arising from a planning enforcement dispute.
The 24-month facility was provided by TAB against a property valued at £1 million, representing a loan-to-value ratio of 33.5%. The borrower, who owns eight rental properties, required the funds after losing an appeal against the London Borough of Barnet over an enforcement notice relating to a separate buy-to-let property.
Planning enforcement background
The enforcement action concerned a property previously operated as three self-contained flats. Following the court’s decision, the property has been returned to use as a single residence. The confiscation order required the borrower to settle the outstanding amount, which accounted for the majority of the loan proceeds.
The borrower received £47,000 in net funds after meeting the liability, intended for maintenance of the wider portfolio. The transaction demonstrates how investors with substantial equity can access capital to address time-sensitive financial obligations, though it also highlights the financial risks associated with planning enforcement breaches.
Market context
Bridging finance has become an increasingly common tool for portfolio landlords facing unexpected liabilities or seeking to restructure holdings. The case comes as rental competition reaches 30 enquiries per property in hotspots, reflecting continued demand in the buy-to-let sector despite regulatory pressures.
The Dollis Hill property used as security was unencumbered, allowing TAB to take a first legal charge. The 24-month term is designed to give the borrower time to manage the portfolio and arrange longer-term refinancing. Underwriting was carried out by Justice Marima, a senior underwriter at TAB.
Calum Knight, TAB’s business development manager for south-eastern England, said: “This is a great example of how a bridging loan can provide a borrower with access to capital held in an unencumbered property when they need to resolve a time-sensitive financial liability.”
Robert Hershaw, founder and managing director of Active Investments, which introduced the loan, said the client needed to raise capital while retaining sufficient funds to continue managing the wider portfolio.
Implications for landlords
The case underscores the potential financial consequences of planning enforcement action for buy-to-let investors. While the borrower was able to access equity to meet the liability, the costs associated with bridging finance and the need for subsequent refinancing add complexity to portfolio management.
The transaction also reflects the challenges facing landlords navigating regulatory compliance, an issue that extends beyond enforcement to broader operational concerns such as conveyancing identified as top transaction bottleneck in property transactions.
