Recognise Bank has provided a £364,000 commercial bridging loan to finance the acquisition of an 11-bedroom hotel in Bournemouth after the original lender withdrew from the transaction at a late stage.
The borrowers, a couple operating businesses in the automotive and beauty sectors, have been expanding their investment property portfolio. The 12-month facility with retained interest was structured at 70% loan-to-value and completed within 22 working days from application.
Property background and strategy
The property is a closed bed and breakfast in a coastal area where overnight holiday accommodation is reportedly oversupplied. The previous owners operated the hotel as a lifestyle business, resulting in limited trading history and no formal accounts for review.
The new owners plan to apply for planning permission to convert the building into a large house in multiple occupation (HMO), targeting young professionals. In the interim period, they intend to reopen the B&B to capture seasonal demand. The conversion strategy comes as HMO regulations continue to evolve, with new legislative requirements affecting landlords across the sector.
Transaction structure
Following the withdrawal of the original lender, Recognise Bank accepted a readdressed valuation and utilised title indemnity insurance to facilitate the deal. Heather Mitchell, lending manager at Recognise Bank, said: “This case required a considered approach given the lack of trading history and the proposed change of use. The borrowers had a clear plan for both the short-term operation of the asset and its longer-term repositioning, which provided a solid basis for the lending decision.”
Ian Monks of Commercial Mortgage Solutions, who introduced the deal, said: “This was a time-sensitive case where the clients were at risk of losing the property following a change in position from another lender. It was important to find a lender that could understand both the immediate trading plans and the longer-term strategy for the asset.”
Market context
The transaction highlights the bridging finance market’s role in supporting property conversions and change-of-use projects. The case also demonstrates the challenges investors face when transactions fall through at late stages, requiring alternative financing solutions within compressed timeframes.
The conversion from holiday accommodation to long-term residential use reflects broader shifts in some coastal markets where tourism-focused properties are being repurposed to meet local housing demand.
