Permitted and Light 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.

Commercial properties:

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.

Residential property:

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.

Auctioned assets:

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.

Converting buy-to-lets:

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.

Converting

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:

• Bedrooms
• Basements
• Lofts
• Garages

Refurbishing

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.

Renovating

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.

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.

1) Plan

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.

2) Time

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.

3) Money

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.