Property Refurbishment Finance

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Home » Bridging Loans » Types of Bridging Loan » Property Refurbishment Finance


What is Property Refurbishment Finance?

Property refurbishment loans are a form of short-term finance designed for property investors, landlords and property developers who are looking to refurbish, or convert a property before renting or selling.

Essentially, if you purchase a property, extend it and refurbish the interior or exterior, the value could increase significantly. We can fund all sorts of works, including title splits, conversions and multiple properties on one title.

Read on below to find out more.


Below are the main criteria points to consider when taking out a property refurbishment loan.

1 Up to 75% Loan to Value (or 100% with additional security).
2 Properties in a poor state of repair are accepted.
3 Fund up to 100% of your refurbishment costs.
4 Rates from 0.48% per month.
5 Loans from £25,000 with no maximum loan size.
6 Borrow from 1 month up to 24 months.
7 Any security considered.
8 Interest can be rolled into the loan.
9 Loans with no early repayment charges available.
10 We will consider any exit route.
11 Adverse credit accepted.
12 Loans available throughout the UK.

How much can I borrow?

Property refurbishment projects tend to be smaller than ground up developments. Although, we don’t operate a strict maximum loan.

We can fund property refurbishment in two ways:

1. As a set percentage of the current LTV:

  • Up to 85% LTV
  • Rates from 0.48% per month for light / medium refurbishment
  • Rates from 0.65% per month for heavy refurbishment
  • Lender fee usually 2% of the loan amount

2. As a set percentage of the current LTV PLUS the refurbishment costs:

  • Up to 70% LTV, plus 100% of the build costs
  • Rates from 0.75%
  • Lender fee usually 2% of the loan amount

Different lenders will consider different loan amounts. Applications are generally written on a case by case basis depending on the demand for the completed product, the experience of the applicant and the level of works involved.

How long does property refurbishment finance take to complete?

We can complete property refurbishment loans in five days – 2 weeks. As there is extra work involved in understanding the planned refurbishment works, it is more common for property refurbishment applications to take 10 – 14 days.

What information will I need to provide?

When looking to take out a bridging loan to refurbish a property, the lender will usually require the following info:

  • An application form giving details of your current circumstances.
  • A breakdown of your assets & liabilities.
  • Details of the property that you wish to purchase/refinance.
  • Details of the works planned on the property, including the costs and timescales for completion.
  • An estimate of the value of the property once works are complete.
  • Details of your experience/any previous projects that you’ve undertaken.
  • Details of your planned exit strategy.

How will the application process work?

You can talk through your project with one of our experts, giving them an outline of the scheme that you are planning to take on.

The lender will usually assess your application and provide written terms within anything from 4-24 hours.

Once these have been issued, you will usually have to provide the information mentioned above.

The application can then be fully underwritten, and a surveyor appointed to produce a valuation report on the property.

Assuming everything goes well here, a formal offer is issued, and the loan can complete subject to completion of the legal work.

What type of properties can be refurbished?

We can offer loans to cover a range of situations including the following:

  • Refurbishment projects
  • Extensions
  • Conversions from house to flats
  • Office to residential conversions
  • Residential to HMO conversions
  • Commercial property refurbishment/conversion

What types of works are acceptable when using a property refurbishment loan?

Each lender will have different rules around what works are acceptable, from light refurbishment through to heavier projects with structural works required.

We work with lenders across the market, so whatever works you’re planning to undertake; we will usually have a solution for you.

In addition to funding the property and cost of works, we can also look to cover professional fees and project management costs.

Does the amount of work I plan on doing matter?

Yes, the planned works will influence the lender chosen and potentially the rate charged. We will take this into account when looking for the most suitable product for you.

The key issue is whether your loan falls under light or heavy refurbishment. This will result in different criteria and products.

Is my project considered light or heavy refurbishment?

Light refurbishment is considered to be projects where no structural work will be taking place.

Examples of light refurbishments include internal decoration, replacing the kitchen and bathroom and replacing flooring.

Heavy refurbishment projects are those that include structural works.

Structural works include extensions, removal or changes to supporting walls or the roof or any changes which require planning permission.

What exit strategies are acceptable to the lender?

It’s important to ensure that your exit route is solid and reliable. There are two points to make in this regard. Firstly, you must satisfy the lender. Secondly, you must be comfortable as failure to repay at the end of the term will cause serious issues for you.

As such, we always consider the exit route before looking to set up a new bridging loan for you. It’s important that you take this approach, whether or not you choose to work with us to arrange your finance.

The most common exit routes are sale of the property once works are complete, or refinance to a mortgage.

Can I draw my money back out after I have added value to the property?

Some bridging lenders will allow you to take out additional borrowing once works are complete.

Where this is the case, the surveyor will generally need to confirm that the works are complete and are to the required standards.

Where the planned exit is refinance, it may work out cheaper to wait for the refinance to complete in order to take your funds out of the property.

Most buy to let mortgage lenders will allow you to take out some, or all of your profit when refinancing.

What is refurbishment buy to let?

Refurbishment buy to let mortgages are an alternative to short-term loans, which act as a hybrid between these loans and buy to let mortgages.

They allow you to buy a fixer upper and complete the works before letting the property out.

In some cases, you may also be able to take out the funds spent on the refurbishment, if the property value has increased sufficiently.

The rates charged tend to be a little higher than traditional buy to let mortgages, but lower than bridging loans.

We consider these loans alongside traditional property refurbishment loans to calculate the best route of funding.


About The Author

This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.

Gary Hemming CeMAP CeFA CeRGI CSP  -  
Commercial Lending Director

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