Bridging loans can help developers save derelict buildings
There are many large derelict buildings that are not in use. Developers using bridging loans can purchase and refurbish these buildings to save them from being demolished.
Many large house builders purchase derelict or semi-derelict buildings, intending to demolish them and build new homes on the land. The derelict building may have planning permission for conversion to flats, but some house builders are not interested in converting them. Sometimes the house builder just has not scheduled the project in their current plans. On other sites, the house builder uses the surrounding land to build houses but does not demolish the old property.
Many house builders are open to approaches by developers to purchase derelict property that they have neglected. An example of this was an old hospital in Manchester, which was built in 1880 and closed in 1995, and its condition deteriorated. The housebuilder built 60 homes on the hospital grounds but did no work on the hospital.
The hospital had planning permission for 12 flats. A developer was interested in adding a third storey to the building in order to build more flats. To do this he needed to buy the property before applying for planning permission. A short-term bridging loan was used to finance the purchase. Planning permission was granted and building work started.
There are many large derelict unoccupied buildings. Bridging finance can be used for developers to create homes in these buildings to help address Britain’s housing shortage.