£413K Title Split Bridge at 100% LTPP in Reading

Colenko provided a £413,000 bridging loan for an established portfolio landlord purchasing a Grade II listed building in Reading at auction.

The borrower’s strategy was to acquire the property, split the title into four long leasehold flats, and refinance onto a refurbishment facility. The facility was structured at 65% LTV and 100% loan to purchase price, with completion required inside a tight auction deadline.

The borrower was an established portfolio landlord with experience in residential property.

There was some minor adverse credit in the background, but nothing that outweighed the borrower’s track record or familiarity with this type of asset. The strategy was clear, practical and based on creating value through the legal structure of the property, rather than relying only on market movement.

This was not a first-time borrower testing a new idea. The borrower understood the asset, the title split strategy and the need to move quickly following the auction purchase.

The transaction centred on a Grade II listed building in Reading, configured as four residential flats.

The borrower had secured the asset at auction and had a clear plan for the next stage. After completion, the intention was to split the title into four long leasehold units, creating a defined uplift in value before refinancing onto a refurbishment finance facility.

This type of transaction can work well, but only where the uplift is real, evidenced and financeable. The title split needed to create a genuine commercial gain, not just a theoretical improvement on paper.

In this case, Colenko was comfortable that the proposed title split would support the value position and provide a credible route into the next phase of funding.

This was a deal where structure, speed and conviction all had to line up.

The first challenge was understanding how the title split would work in practice. Colenko needed to assess how the asset would be reconfigured legally, how that would translate into value, and whether the increased value would support the proposed exit.

The Grade II listed status added another layer. Listed buildings can introduce constraints around works, future flexibility and saleability, so this had to be considered as part of both the valuation and the exit strategy.

Leverage was also at the upper end. The facility represented 100% of the purchase price, which is not something most lenders will consider without a clear and well-supported rationale.

The final challenge was timing. Auction purchases already come with fixed completion deadlines, but in this case the pressure increased when the vendor issued a notice to complete. There was no room for drift in the valuation, legal or credit process.

Colenko focused on whether the value creation was real, whether the exit was credible and whether the transaction could be delivered within the required timeframe.

For the facility to work, the refinance onto a refurbishment bridge had to be achievable. That meant getting comfortable with the title split in practical terms, including how the value would be created, evidenced and recognised by the next lender.

There was detailed internal focus on making sure the credit team understood each stage of the transaction. This was not a case to approve on momentum. The lending decision depended on clarity around the title mechanics, the valuation position and the next phase of funding.

Colenko also built in a requirement for the borrower to progress the refurbishment facility within three months of drawdown. That kept the exit strategy front of mind and helped ensure the next stage of the project was not allowed to drift.

Once the lending approach was agreed, execution depended on maintaining pace without losing control of the detail.

The valuation was instructed immediately, and the legal work progressed in parallel rather than waiting for the valuation report to return. That was important given the compressed auction timetable and the later notice to complete.

Communication remained constant throughout the transaction. Colenko monitored the completion deadline closely and made sure the borrower, broker, valuation team and legal team remained aligned on timing and expectations.

Despite the pressure, the transaction completed within the required timeframe.

Colenko delivered a £413,000 bridging facility in line with the auction deadline, allowing the borrower to complete the purchase.

The title was then split into four long leasehold units, creating the intended uplift in value and supporting the planned refinance onto a refurbishment facility.

By lending at 100% of the purchase price, Colenko reduced the borrower’s capital exposure, improving the borrower’s return on capital and preserving funds for future schemes.

In this case, the lending decision depended on the title split mechanics, the credibility of the refinance exit and the ability to complete under auction pressure.

The key points were:

• Auction purchases can be supported where the valuation, legal and credit work can move quickly enough
• Higher leverage can be considered where the value creation is clear and properly evidenced
• Title split strategies can be funded where the legal structure and valuation uplift are well understood
• Listed buildings can be considered where the constraints are factored into the valuation and exit
• Exit strategy needs to be addressed from the outset, particularly where the next phase depends on refinance
• Fast execution still requires control over the detail, especially where legal structure drives value