£2.3m Below Market Value Bridging for a 14-Unit MUFB in London

A landlord client had agreed to buy a 14-unit multi-unit freehold block (MUFB) in London for £2.3m, priced below the block's open market value. FD Commercial arranged below market value bridging at 90% of the purchase price, so the client completed with a 10% deposit rather than the far larger sum a standard purchase-price-only lender would have required.

The situation

The vendor wanted a fast, unconditional sale and had priced the block accordingly. That gap between the agreed price and the block's true open market value was exactly the kind of genuine discount that supports a higher loan against the purchase price: the lender's exposure against real value stays conservative even as the percentage of the purchase price it is lending rises.

The structure

We arranged the bridge on an unregulated basis, as an investment purchase rather than an owner-occupied one, secured against the MUFB itself. The 10% deposit freed up capital the client would otherwise have had tied up in a single acquisition, which mattered for a portfolio landlord weighing up more than one opportunity at once.

Why it matters

A 14-unit London MUFB at £2.3m is exactly the scale where a below market value structure earns its keep: large enough that the difference between a 10% and a 25% deposit is real money, and specialist enough that most high street lenders will not look at the block, let alone the discount, in the time a motivated vendor allows. See our full guide to below market value bridging finance for how the 90% and 75% limits work together on deals like this one.

See how the same structure applied at a much larger scale in our case study on a Midlands residential portfolio, and on commercial property in our case study on a Bristol warehouse.