Land Bridging London

Land Bridging London

Buying land in London is a huge investment, so whether you have found a small development plot or land sold at auction, having the right finance in place from a trusted lender is imperative. 

At MS Lending Group, we help those looking to acquire land in London with our short-term finance. 

What is a land bridging loan & how to get one in London

In short, a land bridging loan is a short-term finance that is used by investors to purchase land when traditional lending cannot be arranged quickly enough. 

Waiting months for a conventional mortgage or development facility simply isn’t realistic if you’re in a time sensitive position, that is why a bridging loan can provide the capital needed to complete the land purchase and give you time to put your longer-term financial plans in place.

“How do I get a land bridging loan in London?”

At MS Lending Group, our team looks at the individual case at hand and the details of the transaction rather than applying a one-size-fits-all approach. 

We can thereafter provide terms quickly, helping you understand what may be possible before moving forward with your purchase.

The application process will generally involve us asking for details of the site, purchase price, current planning position and your plans for the land. 

Importantly, you will need to demonstrate how you intend to repay the bridging loan, whether that be with another long term development finance or the sale of the land.

What can a land bridging loan be used for in London

Land bridging finance can be used for an array of land purchases across London, including the likes of smaller residential development plots through to larger commercial opportunities.

For developers, you may have identified a site with development potential but need to secure the purchase before you can progress to the next stage of the project.

That is where land bridging is so useful, since it can be used while planning permission is still being pursued. 

Thus, rather than waiting for the planning process to conclude before purchasing the site, a bridging loan may allow you to acquire the land and then work towards the required planning consent.

Other common uses include but aren’t limited to:

• Purchasing residential development land
• Acquiring commercial or mixed-use land where there is a clear development or investment strategy.
• Buying land without full planning permission while progressing the planning process.
• Purchasing land at auction 
• Refinancing or restructuring existing land finance 

The suitability of bridging finance is subjective, and is heavily dependent on your proposed exit. 

Our team can assess the circumstances of your purchase and help you understand whether land bridging finance could work for your London project.

Land in London for sale at auction? How land bridging loans are the solution

Property auctions are a hugely popular option for access to land and development opportunities that aren’t available through the traditional market. 

However, something to remember is that the timescale for completing the purchase is much shorter than with a standard property transaction.

Auction buyers are expected to pay a deposit immediately after a successful bid, with the remaining balance due within the specified completion period; this more often than not, 28-days.

The solution: Land bridging loans

Rather than waiting for a traditional mortgage that can take a long time, a bridging loan gives you the short-term funding required to complete the acquisition. 

Once the land has been purchased, you can then progress onto your wider plans, whether that be planning permission or moving onto development finance.

For example, you may find a London development plot at auction that has strong potential but requires planning work before a development lender will even consider the project.

A land bridge loan can then allow you to complete the purchase first, giving you the time to progress the planning application and arrange the appropriate longer-term funding.

At MS Lending Group, we understand the importance of acting quickly when an auction deadline is approaching, which is why we quickly assess the circumstances of each case.

What MS Lending Group do in London

At MS Lending Group, we provide land bridging finance for investors and developers looking to take advantage of opportunities across London.

We consider all the factors to make a decision that is realistic and reflective of what you can afford.

We look at aspects such as the value of the land, the proposed project and your exit strategy when assessing a case. This means land without full planning permission may still be considered where there is a clear and credible plan for the site.

Our team focuses on speed and quality all the while, so if you have identified land in London and need finance, speak to our team at MS Lending Group about your requirements and we can assess the opportunity with you.

What people are asking…

“I’ve found a small infill site in London and need to secure it before another developer moves. Can land bridging finance in London complete fast enough to hold the plot?”

Potentially, yes, as this is one of the common situations in which land bridging finance is used.

Small infill sites in London can attract interest from local developers because even relatively modest plots can offer great opportunities for additional residential development.

If you have identified a site and the seller wants to move quickly, waiting for conventional finance simply isn’t practical, we understand this. 

A traditional mortgage or development facility may require more information, planning certainty and time than you have available before the seller chooses another buyer.

A land bridging loan is designed to provide short-term finance against the land so that you can complete the acquisition while putting your longer-term funding in place. The important point is that the lender will need to understand the transaction and your proposed exit before confirming whether the finance is suitable.

For a London infill site, this could mean providing details of the purchase price, current value, planning position, intended development and how you expect to repay the bridge.

“The site I want has outline permission only and my development finance won’t release until full approval. Can a land bridging loan cover the gap in the meantime?”

A land bridging loan could be suitable in this scenario, subject to the lender’s assessment of the site and importantly, the exit strategy.

While outline planning permission can provide an important indication of what may be possible on a site, it does not necessarily give you the same certainty as full planning permission.

If your development lender requires full approval before releasing funds, you may therefore find yourself with a gap between acquiring the land and obtaining the longer-term development finance.

That is when a short-term land bridge can potentially cover that period, since you could use the bridging facility to acquire or hold the site while progressing the planning process and then refinance onto development finance once the required permission has been secured.

The key consideration is demonstrating a credible route from the initial land purchase to the eventual refinance. The lender will want to understand what you are proposing to develop, the current planning position, the value of the site and how the bridge will ultimately be repaid.

“I’m buying a London plot with an existing building I intend to demolish. Will a land bridging lender fund a site in that condition?”

Yes, it is possible to get bridging finance against a London site with an existing building, including where the intention is to demolish the structure and redevelop the land. 

However, the existing building and your plans for the site will form part of the lender’s assessment.

From a lending perspective, we are looking at an array of factors; for instance, as a lender, we need to understand what the asset is worth today, what you intend to do with it and how the proposed project will create a route to repayment.

For example, you may have identified an older commercial or residential building on a relatively small London plot where the underlying value is linked more closely to the redevelopment potential of the site than the existing property. 

A land bridging loan could therefore provide the short-term finance needed to acquire the site before moving onto development finance.

At MS Lending Group, each case is assessed individually, so if you have found a London site with an existing building that you intend to demolish, speak to our team about the purchase and your plans.