We regularly see property investors come to us with conversion plans. Turning old, underutilised commercial spaces into residential homes has proven especially popular in recent months. There has been reduced demand for office and retail space following the pandemic. At the same time, the UK has been struggling with an undersupply of suitable homes.
As a result, we’ve seen a wave of offices and other commercial properties converted into flats in recent years. But, conversion projects can also work in the opposite direction. Two clients turned to us for funding to convert a residential home into a semi-commercial property.
To make sure this was a viable undertaking, our underwriter got to work. He made sure everything was accounted for before the funding could be issued.
Everything was accounted for
Our underwriter saw the underlying investors already had experience in property conversion. Also, we noted this specific project was unlikely to raise any objections from the local council. This reduced the chances of any delays emerging.
Additionally, the borrower had interest from a third-party business to utilise the space once the refurbishment had completed. This provided further security and time, allowing the borrowers to have the option to switch to a long-term commercial refinancing strategy if they wished.
We were provided with a schedule of the works, breaking down how the funding would be utilised. This, coupled with the borrower’s experience, made us comfortable in issuing funds.
Britain wants to get back to business
Refurbishment work is likely to ramp up in the property market over the coming years. Out of both desirability and necessity. New environmental legislation will force many homeowners to upgrade their properties and meet new requirements.
Also, many high streets across the UK are still struggling. The sight of empty stores has prompted action. Pressure is mounting to utilise these empty commercial spaces for residential rentals.
But this pressure is coming up against resistance in the mainstream market. High street lenders are tightening their criteria’s, making it difficult for borrowers with complex plans. Fortunately, we’ll be there to support property investors trying to get ahead of the curve. See how specialist finance can help with your refurbishment plans.