An investor identified a genuine below market value opportunity: a three-bedroom property in a solid residential area of Stockport, listed with a motivated vendor who needed a fast sale. The agreed purchase price was £370,000. The investor's research — supported by recent comparable sales on the same street — suggested the open market value was at least £500,000. That £130,000 discount is the equity that makes a 95% LTV bridging loan possible.
Here's the key point that most investors misunderstand: the lender doesn't lend 95% of the property's value. They lend 95% of the purchase price or 70% of the open market value — whichever is lower. On this deal, 70% of £500,000 is £350,000, and 95% of £370,000 is £351,500. The lower figure wins, so the lender advanced £350,000. The investor needed just £20,000 of their own money to complete — £20,000 of the purchase price plus transaction costs. We arranged it in 12 working days.
| Detail | |
|---|---|
| Finance type | Bridging finance — high-LTV on BMV purchase |
| Total facility | £350,000 |
| Property | 3-bedroom residential, Stockport |
| Purchase price | £370,000 |
| Open market value (RICS) | £500,000 |
| Discount to OMV | £130,000 (26%) |
| Lender's calculation | 95% of purchase (£351,500) vs 70% of OMV (£350,000) — lower figure applies |
| Loan advanced | £350,000 (94.6% of purchase price) |
| Investor cash required | £20,000 (5% of purchase price plus costs) |
| LTV on open market value | 70% |
| Monthly rate | 0.85% |
| Term | 12 months |
| Exit strategy | Refinance to BTL mortgage |
| Time to completion | 12 working days |
This is the part that confuses most investors and, frankly, quite a few brokers. The lender's calculation has two ceilings and you hit whichever is lower.
The maximum the lender will advance against what you're actually paying for the property. On this deal: 95% of £370,000 = £351,500.
The maximum the lender will advance against what the property is actually worth, confirmed by an independent RICS valuation. On this deal: 70% of £500,000 = £350,000.
The lender advances the lower of the two figures. On this deal, £350,000 is lower than £351,500 — so the loan is capped at £350,000. The difference is small here, but the principle matters: on deals where the discount to OMV is smaller, the 70% of OMV ceiling bites earlier. If the OMV had been £450,000 instead of £500,000, then 70% of OMV would be £315,000 — and that's the maximum, regardless of the 95% of purchase price figure.
💡 The formula: Loan = minimum(95% of purchase price, 70% of open market value). The bigger the gap between purchase price and OMV, the more of the purchase price the lender will fund. A genuine 25%+ discount to OMV is what makes 95% LTV bridging work.
The lender's entire risk model rests on the open market value being materially above the purchase price. If the RICS valuation comes in at or near the purchase price, there is no discount — and the 70% of OMV ceiling collapses to a figure that won't fund 95% of anything. The investor had assembled strong comparable evidence: three sales on the same street in the preceding 12 months at £480,000–£520,000, all for similar property types. But comparables are not the same as a formal valuation, and the risk of a conservative RICS valuation — particularly in a market where prices have moved — is real.
The vendor's motivation was the reason the discount existed — they needed to complete within four weeks. That meant the bridging facility had to be arranged, underwritten, valued, and legally completed within a tight window. A delayed valuation or a slow solicitor would have collapsed the deal and the investor would have lost the property.
Not all bridging lenders offer a 95% of purchase price product. Most cap at 75% LTV regardless of the discount. The lenders that do offer the 95% BMV structure have specific criteria: a minimum discount to OMV (usually 20-25%), a residential property type, and a credible exit. Finding the right lender — and presenting the deal in a way that triggers their BMV product rather than their standard LTV product — requires knowing which lenders have the product and how their underwriting team assesses it.
We identified a lender with a dedicated BMV bridging product that explicitly funds up to 95% of purchase price or 70% of OMV — whichever is lower. This lender's underwriting team is experienced in BMV transactions and has a streamlined valuation process for deals where the comparable evidence is strong. The key was presenting the deal correctly: as a BMV purchase with a genuine discount, not as a standard bridging loan where the LTV happens to be high.
The lender instructed an RICS valuer with local Stockport knowledge. We pre-briefed the valuer with the investor's comparable evidence pack — the three recent street sales, Land Registry data, and current listings on the same road. Pre-briefing doesn't influence the valuation, but it ensures the valuer has the best evidence available rather than relying solely on their own database search. The valuation came back at £500,000 — exactly in line with the investor's research. With the OMV confirmed, the 70% ceiling was set at £350,000, and the facility was confirmed.
The investor's exit was straightforward: refinance to a BTL mortgage within 6-9 months. At a BTL LTV of 75% against the confirmed £500,000 OMV, the refinance would raise £375,000 — comfortably repaying the £350,000 bridging loan plus accrued interest and fees, with approximately £10,000–£15,000 to spare. The exit was documented in the credit submission with BTL mortgage product evidence and the investor's rental coverage calculation. A clean, credible exit is what gives the lender the confidence to lend at 95% of purchase price.
💡 Key point on exit strategy: The lender is comfortable with 95% of purchase price because their real exposure is 70% of OMV. But they still need a credible exit. If the exit is a refinance, the refinance LTV must be achievable against the OMV — not the purchase price. At 75% BTL LTV against £500,000, the exit is clear. If the OMV had been £400,000, a 75% BTL refinance would only raise £300,000 — not enough to clear the bridge. The OMV has to support both the bridging loan and the exit.
Investor approached us with the purchase price and their comparable evidence. We confirmed the deal met BMV criteria (26% discount to OMV), identified the specialist BMV bridging lender, and submitted a heads-of-terms the same day.
Full submission including comparable evidence pack, purchase contract, investor financial profile, and documented BTL refinance exit. DIP issued within 36 hours confirming the 95% of purchase / 70% of OMV structure.
Valuation instructed and completed within 4 working days. OMV confirmed at £500,000. Facility formally approved at £350,000 (70% of OMV, the lower of the two ceilings). Legal work commenced immediately.
Solicitors expedited the charge and transfer. Completion achieved on Day 12 — well within the vendor's four-week deadline. £350,000 drawn. Investor contributed £20,000 from their own funds.
"This investor bought a £500,000 property for £370,000 and needed just £20,000 of their own money to complete. The £130,000 discount is the equity that funded the deposit. That's what BMV bridging does — it turns a genuine discount into leverage. The key is knowing which lenders have the product and making sure the valuation confirms what you already know the property is worth."
— MW Capital AdvisoryIf you've found a genuine BMV deal — a property worth materially more than you're paying — we know which lenders will fund 95% of the purchase price. Don't let a broker who doesn't understand BMV bridging tell you 75% is the maximum. Speak to us with the numbers and we'll tell you exactly what's achievable.
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