£1.4m bridge unlocks lease extension strategy in St John's Wood

A property investor has secured a £1,462,500 bridging finance facility from SDKA to purchase a luxury three-bedroom apartment in St John's Wood, with the loan term being used to pursue a Section 42 (S42) lease extension that will broaden the borrower's refinancing options.

The apartment sits within the Yoo Building, a sought-after development in one of London's most desirable postcodes. A high ground rent on the property currently limits the number of buy-to-let lenders willing to offer term mortgages against it. By serving an S42 notice during the bridge term, the borrower can extend the lease and reduce the annual ground rent liability, bringing the property within the criteria of a wider pool of lenders.

The S42 process typically takes between three months and one year to complete. Once resolved, the investor expects significantly more refinancing options to become available, making the bridging finance a practical stepping stone rather than a last resort.

The deal was introduced by Jack Cuthbert, high-net-worth finance broker at Articus Finance, and completed at 75% LTV on a flat rate of 0.84% per calendar month over 12 months.

"My client's requirements for the loan were quirky to say the least," Cuthbert said. SDKA were excellent; they addressed each point, the entire process was smooth and efficient, and their communication was extremely impressive. In such circumstances, to deliver the loan my client required is simply faultless."

"This is a bridging finance as a true solutions product, using the money to acquire an in-demand property in a highly sought-after location and then using the term to open up the number of lenders who will provide long-term buy-to-let finance," said Kunal Mehta, managing director of SDKA (pictured).

SDKA, founded in 2016, is an unregulated bridging lender operating across England, Wales and Scotland, offering fixed interest rates from 0.84% per calendar month on residential, semi-commercial and commercial properties up to a maximum LTV of 75%.