£100k - £20m
up to 75%
3 - 21 months
We have both in-house funds and several funding lines available, meaning we can provide fast finance for your refurbishment loan. When it comes to renovating a property, getting works underway quickly is important.
What are light and permitted development bridging loans?
Refurbishment projects are popular in the UK for many reasons:
- They hold the potential to add tens of thousands of pounds to the overall property value
- Refurbished properties can provide increased rental income from buy-to-let and HMO tenants
These forms of bridging loans allow you to purchase a property, then extend and/or renovate both the interior and exterior, in order to produce the best version of your property for selling or letting. Whether it is for your main residence or an asset in your property portfolio, a refurbishment or conversion bridging loan can be a great way to gather funds quickly so that work can start.
What's the difference between light and permitted development bridging loans?
Light development finance:
Light development finance is also known as a refurbishment loan – aims to improve the interior aspects of your property. The work often relates to installing a new kitchen or bathroom, renovating an old building and general redecorating.
Permitted development finance:
Permitted development finance is also known as conversion finance and often relates to heavy refurbishment works. This could be the need for a loft conversion, a barn conversion or an extension.
What kinds of property can I use a refurbishment loan on?
From renovating office buildings, to converting a commercial asset into a residential dwelling, you can use a refurbishment loan for commercial properties. A popular way to use it is by using funds to convert a barn into a luxury house.
Updating a property from your portfolio is a great way to potentially increase property value, or attract new buyers and tenants willing to pay premium prices for premium properties.
There are often cheaper assets available at auction that need renovation or refurbishment works. You can use a refurbishment loan to do the work quickly, and then sell the property on.
We also provide HMO conversion loans. This allows landlords to potentially increase their monthly yield by converting their current buy-to-let property into a house of multiple occupancy.
Second charge loans:
We can provide a second charge loan on your main residence should you want to complete work on another property for business purposes – such as renovating a buy-to-let, refurbishing a commercial property, or any of the other scenarios mentioned above.
What are the three different types of refurbishment?
A conversion is a project that changes the use or function of a particular building or room. Popular spaces to convert within the home include:
Refurbishment has the potential to enrich the overall value and quality of the property. It usually relates to actions such as installing new bathrooms, kitchens, or general redecorating.
Redecorating properties is a regular task performed by landlords, particularly those with HMOs. This style of property usually requires constant maintenance, as they suffer high volumes of wear and tear from a constant stream of tenants. It falls to the landlord to uphold and maintain the correct conditions for these properties.
Renovation is the process of improving or modernising an old or damaged building. These types of projects are becoming popular due to COVID-19, especially where landlords want to increase their income, as they can potentially purchase old properties cheaply at auction, renovate, and then sell on.
Are there regulations I need to adhere to when using a refurbishment bridging loan?
Regulations for permitted development finance will vary depending on the lender you are using. Typically, each unregulated lender will have their own policies that will apply to their loan.
Do building regulations apply?
Building regulations will not apply when using a light development bridging loan. However, permitted development projects that include works such as a loft or bedroom conversion or adding an extension, may require planning permission. As we do not supply a development finance for ground up development loans, this means we can only supply as bridging loan once planning permission is granted, or if none is necessary.
You will need to make sure you check with your local council for any restrictions or minimum requirements – such as roof height for a loft conversion – that apply to your area. You will need to check this even if you do not require planning permission. It can also change depending on your location and council.
How do I know if property refurbishment projects are right for me?
This should include a clear understanding of what changes are possible and how best to utilise the time needed for each individual section of work. If works can start at the same time, taking note of these could save you both time and money. An initial budget can help account for any potential contingencies that may occur due to weather or material delays.
Works can take anywhere from a couple of weeks to months, to years! It all depends on whether it’s refurbishment, conversion or renovation works and the size of the project. If you’re looking to complete within a specific timeline, then arranging a time schedule with your builder to keep things on track is a must.
Whilst budgets create a solid outline, construction works are notorious for running over schedule for a variety of reasons, including our temperamental British weather, usually resulting in additional labour costs. Arranging refurbishment finance can be a great option for property investments in need of additional capital to finish refurbishment works.