Unlock Hidden Value: Buying Short-Lease Properties for Maximum Profit

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Unlock Hidden Value: Buying Short-Lease Properties for Maximum Profit

Why Buying Short-Lease Properties is a Smart Investment

For property investors and developers in the UK, short-lease properties offer a unique opportunity to create value. With recent changes to lease extension rules, investors no longer need to own a property for two years before extending its lease. This makes short-lease properties an attractive investment option, especially when combined with refurbishment and strategic financing.

Real-World Example: Turning a Short-Lease Flat into a Profitable Asset

Consider this scenario:

  • An investor purchases a flat in London for £1.25 million, but it has only 30 years remaining on the lease.
  • The investor plans to spend £200,000 on a lease extension and an additional £250,000 refurbishing the property.
  • After the refurbishment and lease extension, the flat’s value increases to £2.7 million—a significant uplift in just a short period.

This kind of strategic investment can yield huge profits, provided you have access to the right financing solutions.

How to Fund Short-Lease Property Investments

One of the biggest challenges in purchasing short-lease properties is securing the necessary funds for both the lease extension and refurbishment. This is where Refurbishment Bridging Loans come into play.

Refurbishment Bridging Loans – Key Features

✅ 75% LTV NET towards the purchase price
✅ 100% of lease extension costs covered
✅ 100% of refurbishment costs covered
✅ 12-month term – ideal for fast turnaround projects
✅ Competitive rate of 0.79% per month (BBR linked)
✅ Loan amounts from £150,000 to £15m

By leveraging a bridging loan, investors can quickly complete the purchase, extend the lease, refurbish the property, and refinance or sell at a substantial profit.

Types of Property Projects Funded

Bridging loans can be used for a variety of property projects, including:

1. Decorative Refurbishments

Ideal for outdated properties or auction purchases, where a quick cosmetic upgrade can significantly increase value. This includes modernising kitchens, bathrooms, flooring, and general décor to enhance appeal.

2. Structural Refurbishments

More extensive works such as:

  • Loft conversions
  • Rear and side extensions
  • Projects requiring planning permission or permitted development

These improvements can drastically increase the usable space and value of a property.

3. Change of Use Projects

Converting a property for a different use can unlock substantial value. This includes:

  • Converting a house into an HMO (House in Multiple Occupation)
  • Splitting a house into multiple flats
  • Commercial-to-residential conversions (such as turning an office into apartments)

Why Now is the Best Time to Invest in Short-Lease Properties

The recent legal changes eliminating the two-year ownership requirement for lease extensions have opened the door for investors to capitalise on short-lease properties immediately. This makes it easier to enhance property value without long holding periods.

With the right financing in place, short-lease properties can provide high returns in a relatively short timeframe. Whether you’re an experienced property developer or just starting out, this is an exciting opportunity to maximise your investment potential.

The Importance of Working with an Expert Broker

Navigating the world of property finance can be complex, especially for those unfamiliar with bridging loans and lease extensions. Working with an experienced broker ensures that you:

  • Gain access to the best financial products tailored to your project.
  • Avoid costly mistakes that could impact profitability.
  • Secure funding quickly to prevent delays in your investment strategy.

Get Expert Advice & Funding Solutions

At Sunrise Commercial Finance, we specialise in securing fast and flexible bridging loans for property investors. Whether you need funding for a lease extension, refurbishment, or a complete property transformation, our team is here to help.

For more information contact us for a fees free chat.

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