Asset Stabilisation &
Re-structuring

For the astute property investor, the greatest returns are often realised by transforming underperforming or newly developed assets into stable, high-yielding investments. This "value-add" lifecycle—acquiring a property with potential, enhancing it through refurbishment or development, and then establishing a consistent income stream—is a proven path to success. The final, critical step in this process is to re-structure the finance to reflect the asset's new, enhanced status.

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Asset Stabilisation & Re-structuring Finance is the crucial financial mechanism that underpins this strategy. It allows you to transition away from short-term, higher-cost funding (such as a bridging or development loan) onto efficient, long-term finance once your project is complete and tenanted. At Knightly Group, we specialise in guiding our clients through this entire journey. We don’t just arrange a loan; we structure a multi-stage funding strategy that secures your asset, maximises its value, and optimises your long-term returns.

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The Path to Stabilisation: From Potential to Performance

Our expertise covers the crucial refinancing stage for a wide range of value-add projects. We step in once the active works are complete and the property is ready to perform as a long-term investment. Key scenarios include:

• Post-Refurbishment Refinancing: You have used short-term finance to acquire and complete a heavy refurbishment of a property. Once the works are finished and the property is ready for tenants, we arrange long-term finance based on its new, higher market value.

• Financing Post-Conversion: Following the conversion of a commercial building to residential units or a single dwelling into a high-value HMO or Multi-Unit Block, we secure the specialist mortgage needed to refinance the project and exit the initial development loan.

• Newly Tenanted Developments: Upon practical completion of a new-build scheme, we arrange the finance required to hold the asset as a long-term rental investment, allowing you to let the properties and establish an income track record.
   

Strategic Re-structuring: Unlocking Equity & Enhancing Cash Flow

Once an asset is stabilised (i.e., works are complete and it is let or ready to let), the right financial structure is key to capitalising on your success. Our strategic approach allows you to:

• Release Newly Created Equity: This is the primary goal for most investors. By refinancing based on the enhanced market value, you can release a significant portion of your initial capital and profit, ready to be deployed onto your next project.

• Secure Long-Term Profitability: Moving from expensive bridging or development finance to a cheaper, long-term mortgage dramatically improves your monthly cash flow and secures the asset's viability as a profitable investment for years to come.

• Consolidate into a Portfolio: A newly stabilised asset can be refinanced on its own or consolidated into a wider Portfolio Finance facility, streamlining your borrowing and potentially improving the gearing across all your assets.
   

Key Financial Structuring & Criteria

The core principle of this finance is that lenders will base their facility on the asset's new, improved condition and value, not its original purchase price.

• The Valuation Principle: Our funding solutions are secured against the certified Open Market Value (OMV) of the property after the works have been completed. This ensures the value you have created is fully recognised.

• Loan to Value (LTV): We can typically arrange finance up to 75% of the enhanced market valuation, allowing for maximum equity release.

• Loan Term: Facilities are structured for the long term, typically ranging from 5 to 30 years.

• Repayment Options: We can arrange facilities on a basis that suits your cash flow strategy:

  • Interest-Only: Provides lower monthly outgoings to maximise your rental profit.

  • Capital & Interest: A structured repayment plan that reduces your debt and builds equity over the loan term.

• Property Types: We have extensive experience in re-structuring finance for all types of value-add projects, including HMOs, MUFBs, standard Buy-to-Lets, and commercial or semi-commercial assets.

• Borrower Structures: We cater to all modern landlord structures, arranging finance for both private individuals and corporate entities, including Limited Companies and Special Purpose Vehicles (SPVs).
   

Asset stabilisation and financial re-structuring are the hallmarks of a sophisticated property investor. Contact our specialist team today to discuss how we can help you unlock the full potential of your property investments and prepare for your next venture.