£207,500 Derelict Pub Bridging Loan Completed in 3 Weeks
An SPV client needed to complete on a vacant pub in Leicester — a property in poor condition, with limited demand as it stood, but with planning permission in place for 9 residential flats. The valuation was instructed on present condition and came back lower than expected. We still secured a £207,500 derelict pub bridging loan at 76% of 180-day value, interest fully retained, completed in 3 weeks.
Deal Snapshot
The Client Scenario
Our client — an SPV limited company — had agreed to purchase a vacant pub in Leicester. The property had been out of use for some time and was in very poor condition. Bringing it back into service as a pub would have required significant expenditure, and even then, demand for the property on that basis would have been limited.
The real value in the deal wasn't the pub trade at all. The property came with planning permission already in place to convert the building into 9 residential flats — a clear, credible route to value for an SPV buyer with a conversion plan.
The problem is a familiar one: mainstream finance doesn't touch derelict, non-income-producing commercial property. A bridging loan was the right product — but the case still had to survive a valuation, and the lender wanted that valuation done on the property's present condition, not the planning upside.
If the funding couldn't be arranged on the property as it stood, the purchase — and the entire conversion opportunity behind it — was at risk.
What Could Have Gone Wrong
A derelict pub is close to the top of the list of security types most lenders decline on sight. No income, limited as-is demand, and a condition report that invites caution — every part of this case needed positioning before submission.
Then, mid-application, the valuation came back lower than expected. On a weaker case, that's usually where the deal ends. The specific risks on this file:
The Solution
We presented the case on the strength of what the site actually was: a fully consented residential conversion opportunity with a clear exit — not a failing pub. That framing mattered, because it gave the lender comfort in the security without needing the property to perform as licensed premises.
When the valuation came back lower than expected, we reworked the numbers with the lender rather than re-placing the case, and agreed lending at 76% of the 180-day value — strong leverage for a property in this condition. The facility was structured with 12 months of interest fully retained at 0.9% pcm, so the client makes no monthly payments while the conversion plans progress.
Buying a derelict or unmortgageable property?
Vacant pubs, commercial units with planning, properties in poor condition — we know which lenders will fund on present condition, and we structure the case correctly from day one.
A2Z Bridging Ltd is authorised and regulated by the Financial Conduct Authority · FRN 808769
The Outcome
Need a Derelict Pub Bridging Loan — or Finance on Any Property Others Won't Touch?
Vacant, run-down, or non-income-producing — the property doesn't have to be perfect. The case has to be presented right. Tell us what you're buying and we'll tell you how it gets funded.
A2Z Bridging Ltd · Authorised & Regulated by the FCA · FRN 808769 · We are a broker, not a lender.
Frequently Asked Questions
Yes — but not with mainstream lenders, and not without positioning the case correctly. On this deal, the property was a vacant pub in very poor condition that couldn't trade without significant expenditure. What made it fundable was the consented planning for 9 residential flats and a clear exit. Bridging lenders will fund derelict property when the story behind the security makes sense — that's the part we build before submission.
A 180-day valuation estimates what the property would sell for if it had to be marketed and sold within 180 days — typically lower than open market value, because it assumes a constrained sale window. Lenders use it on harder-to-sell security, like a derelict pub, to protect their downside. On this case the lender advanced 76% of the 180-day figure — strong leverage given the property's condition.
It doesn't have to end the deal — but it does change the numbers, and how the broker responds in the following days usually decides the outcome. On this case the valuation came back below what was anticipated. Rather than re-placing the case and losing the completion window, we reworked the figures with the same lender and kept the purchase on its original timeline. Most deals that die at valuation stage die because they're re-started, not restructured.
Not always. A schedule of works is standard on development and refurbishment products, but on a purchase bridge the right lender can fund the property in its present condition — which is exactly what happened here. No schedule of works, no staged drawdowns, no monitoring surveyor. That kept the process simple and allowed completion in 3 weeks. If your plan is to secure the asset first and finalise works later, this structure is often the cleanest route.
Planning permission rarely changes the valuation basis on a purchase bridge — lenders will still typically value present condition, as they did here. Where it makes the difference is lender confidence: consented planning for 9 flats gave this case a credible exit, which is what supported 76% of 180-day value on a property most lenders would have declined outright. Strong planning doesn't raise the valuation — it gets the case approved.