CPC Finance clients wanted to convert a hotel above a ground-floor pub into 1-2-bedroom apartments in Bourne, Lincolnshire.
The clients purchased the freehold for the pub and upstairs hotel together for £250,000 without planning consent. CPC Finance helped the client obtain the bridging loan for the purchase and the buyers put down a 40% deposit.
They obtained planning consent to convert the hotel into 15 1-2-bedroom apartments. One of the requirements of the planning permission was that they had to leave the pub below as a commercial business. It took 12 weeks from the purchase date of the property to obtain permission to do the conversion works. Before putting in the application formally, the client had investigated the options with the local council and put in a pre-application.
Once the planning permission was secured, CPC Finance helped the client obtain a further refurbishment loan to convert the hotel into flats. It cost £750,000 to convert the hotel into the apartments, leading to a valuation on completion of works of £1,455,000.
After works, CPC Finance helped the client secure a 75% LTV residential investment term mortgage for the apartments, excluding the pub. The flats are let out from a single freehold title. The annual rent from the flats is £126,000, which does not include the pub rent. The business value of the pub was not counted in the final valuation as the future of pubs is particularly uncertain at the moment.