Property Refurbishment Finance

Property refurbishment finance is a specialist loan designed to fund the purchase and renovation of investment property. Unlike a standard mortgage or bridging loan, a refurbishment facility is specifically structured to cover both the acquisition cost and the refurbishment works, with drawdowns released as renovation milestones are completed.

This type of finance suits property investors and developers who buy below market value, add value through refurbishment, and either sell at a profit or refinance onto a long-term buy-to-let mortgage at the improved valuation. It is the core funding product for the BRRR strategy (Buy, Refurbish, Refinance, Rent), one of the most popular property investment approaches in the UK.

As specialist refurbishment finance brokers, we source from a wide panel of lenders including bridging specialists, challenger banks, and development finance providers. Whether your project involves light cosmetic improvements or a heavy structural conversion, we find the right lender and product for your scope of works.

Lenders distinguish between light refurbishment and heavy refurbishment based on the scope of works involved. Understanding which category your project falls into is important because it determines which lenders can fund you, the costs, and the process.

Light refurbishment covers cosmetic improvements such as new kitchens, bathrooms, decoration, flooring, and garden landscaping, without any structural changes or requirement for planning permission. Light refurb facilities are faster to arrange, typically cheaper, and often complete within 2-3 weeks. Most bridging lenders offer light refurbishment finance with a straightforward schedule of works.

Heavy refurbishment involves structural alterations, extensions, loft conversions, basement excavations, change of use, or conversion work that requires planning permission or Building Regulations approval. Heavy refurb finance works more like a small development finance facility, with professional costings from a quantity surveyor, a monitoring surveyor appointed to verify completed works, and staged drawdowns released against milestones. For larger heavy refurbishment projects, a full development finance loan may be more appropriate.

A refurbishment loan is structured in two parts. The acquisition element funds the purchase of the property, typically at 70-75% of the current market value or purchase price (whichever is lower). The refurbishment element funds the cost of works, usually released in arrears against completed stages verified by the lender or their surveyor.

For light refurbishment, the works funding may be released in a single drawdown or two stages. For heavy refurbishment, drawdowns are typically aligned to specific milestones in the schedule of works, with the lender's monitoring surveyor inspecting the property before each release. Many lenders will fund 100% of the refurbishment costs on top of the acquisition facility, provided the combined loan stays within their LTV parameters based on the projected end value of the property.

The loan term is typically 6 to 18 months, giving you time to complete the refurbishment works and arrange your exit, whether that is selling the property or refinancing onto a longer-term mortgage product. Interest can be serviced monthly or rolled up into the loan balance for repayment at exit.

Refurbishment finance rates depend on the scope of works, the LTV, and whether the project is classified as light or heavy refurbishment. Light refurb loan rates typically start from 0.65% per month with arrangement fees of 1-2%. Heavy refurbishment rates start from around 0.75% per month, reflecting the additional risk and complexity.

Additional costs include a valuation fee (both current and projected end value), legal fees for the lender's solicitor, and for heavy refurb projects, monitoring surveyor fees for each site inspection. Arrangement fees are usually paid from the loan advance, so you do not need to fund them separately upfront.

We always provide a full cost breakdown before you commit, and you can model different scenarios using our finance calculator. Understanding the total cost of your refurbishment finance, including all fees, is essential for calculating whether your project stacks up commercially.

Eligibility for property refurbishment finance depends on the property type, scope of works, your experience, and the projected end value. Most lenders require a clear schedule of works with realistic cost estimates, evidence of comparable property values to support the projected end value, and a defined exit strategy.

Both individuals and limited companies can apply for refurbishment finance. Many property investors and developers use limited company (SPV) structures for tax efficiency, and the majority of lenders on our panel are comfortable lending to limited companies. First-time investors and developers are considered, although some lenders may require additional comfort such as a qualified project manager for heavy refurbishment works.

The property types funded include residential houses and flats, HMOs (houses in multiple occupation), commercial properties, mixed-use buildings, and semi-commercial properties. Properties that are currently uninhabitable or unmortgageable are routinely funded, as the purpose of the refurbishment is to bring them to a lettable or saleable standard.

To apply for property refurbishment finance, submit your project details in our Deal Room. Include the property address, purchase price (or current value if refinancing), a schedule of works with cost estimates, and the projected end value once refurbishment is complete.

We match your refurbishment project to lenders experienced with your specific property type and scope of works. Whether you are converting a commercial unit to residential under permitted development rights, transforming a standard house into an HMO, or carrying out a cosmetic refurbishment before refinancing to a buy-to-let, we find the right lender and negotiate competitive terms on your behalf.