InterBay completes £3.8m commercial refinance to fund new build rental scheme

Specialist commercial lender InterBay, part of OSB Group, has completed a £3.8m commercial facility in Central London to support the development of two new residential properties.

The asset, a four-storey commercial building with three tenants, was originally held within a family trust established by the client’s parents. The trust was later annulled, requiring the property to be transferred into the client’s sole name.

The restructure also involved a second property within the trust being allocated to another family member, creating multiple complexities and exceptions to standard lending policy.

The client sought to release capital from the commercial asset to fund the construction of two residential units on separately owned land, where planning permission had already been secured.

InterBay provided an interest-only term loan over 120 months, enabling the client to progress the build programme without the additional cost or administration typically associated with a development finance facility.

The completed units will be retained as rental properties within the client’s portfolio.

Marc Callaghan, Head of Commercial Lending at InterBay, said:

“Transferring property out of a trust structure can be highly complex and must meet specific legal and taxation conditions. Considerations around Inheritance Tax (IHT), Capital Gains Tax (CGT) and other liabilities all come into play.

Our Specialist Finance Account Manager, Simon Ward, worked closely with Mark Jerman at Watts Commercial to identify the most effective route to funding the client’s development ambitions.”

Mark Jerman, Senior Commercial Manager at Watts Commercial Finance, added:

“The client needed to raise capital to support the build costs for two new residential properties. While a traditional development facility was an option, it would have introduced additional professional layers, fees and complexity.

Instead, we agreed a simpler, more cost-effective solution: securing a term loan against unencumbered assets within the client’s portfolio, with full funds released at the outset.

InterBay demonstrated strong expertise and flexibility throughout, and the collaborative approach between our teams resulted in an excellent outcome for the client.”

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