This is a serviced bridging loan agreement with interest paid monthly on a loan term of 12 months against a terrace of 3 existing properties at 3, 5 & 7 Mowbray Street, Kelham Island, Sheffield, S3 8EN. The property is currently used as an 18 bed House of Multiple Occupation (HMO). The borrower has agreed a purchase price of £490,000 with completion set for 4th September 2019. The borrowers strategy is to improve and refurbish the HMO to provide more bedrooms, all with en suites, Once planning has been granted the borrower will look to re-finance onto a refurbishment loan. During this initial loan the borrower will let out number 7 under a single AST. CrowdProperty has deemed the total income across the borrowers portfolio will be sufficient to meet the monthly payments. Therefore, lenders will receive 7.5% per annum, but will be paid monthly at a rate of circa. 0.625%.
The property is to the north of Sheffield City Centre; Sheffield has a population of 518,090 (2011) and is situated 12.5 miles north of Chesterfield and 22 miles south west of Rotherham. Kelham Island has had an influx of investment with the vision of creating a residential area for working professionals with much of the industrial and commercial accommodation having been replaced by apartments, restaurants and bars. Sheffield train station is just 1.2 miles from the subject properties. Trains to Manchester and Leeds take less than an hour and trains to Birmingham take around 71 minutes.
Local amenities include but are not limited to:
Sheffield Hallam University – 1.1 miles
Sheffield City Hall 0.9 miles
Kelham Island Community Childcare – 0.5 miles
Sheffield Crown Court – 0.5 miles
Kelham Weir – 0.3 miles
Tesco Express – 0.3 miles
Bus Stop 0.1 mile
Kelham Island Museum – 0.4 miles
Sheffield City Kayak Club – 0.4 miles
The subject properties comprise the following:
Ground Floor: 859
First Floor: 677
Second Floor: 1,097
The 3 storey terraced buildings are about 100 years old and are constructed of traditional brickwork under a pitched roof. Having been used as a HMO for many years the property is now tired and requires extensive refurbishment. The proposed planning application will seek to obtain consent to provide 23 HMO rooms, all of which will have ensuites, together with communal kitchen and living areas. The borrower also intends to split the titles so that each property will be separately licensed and can therefore independently be refinanced onto long term commercial mortgages.
The refurbishment works will commence on a phased basis once the borrower has secured the improved planning consent. The Borrower is securing a company let moving into No. 7. which will take affect after completion and a light refurbishment. This will provide rooms for 6 working professionals at a time as Serviced Accommodation, at £20 per occupant per night (for 5 nights per week).
Once planning has been granted the borrower will look to refinance onto a refurbishment loan. Should planning not be granted the borrower will look to dispose of the properties accordingly. Please note, CrowdProperty has lent on the existing value assuming planning has not been granted.
min. loan (6 months)
12 month loan
CrowdProperty's interest on this project is strictly taking into account the existing use value. Having worked closely with the borrowers and with the project being situated outside of both an Article 4 area and conservation area CrowdPoperty are confident that planning will granted and therefore enhanced values. The borrowers have hands on experience of managing properties, having chosen a city centre location they are confident there will be demand for the properties, either for a re-sale or to let.
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Our in-house experts perform strict and rigorous checks on all projects proposed. With almost 100 years’ experience in the industry, we work in partnership with our borrowers. We work in partnership with our borrowers until project completion. If a borrower were to default, CrowdProperty’s 1st legal charge allows us to take ownership of the project. Here we would utilise industry experience to ensure the most suitable exit strategy was followed.