Refinance Former Pub Conversion to 19-Bed HMO.

The Requirement:

Our client needed a funding partner for both stages of their project:

1. To refinance an existing short-term bridge and fund the full cost of conversion of a former pub into a 19-bedroom HMO.
2. On completion of works, to transition seamlessly to long-term investment finance, enabling capital extraction while retaining the asset as a high-yielding HMO.

The aim was to secure a structure that would support the project from initial works right through to stabilised investment, without the disruption and cost of switching lenders mid-way.

About The Property:

The security was a former public house with planning in place to convert the building into a 19-bedroom HMO. The scheme involved:

• Conversion from commercial use to multi-let residential.
• Works predominantly internal in nature, with only a small external staircase required as part of the alterations.

This provided a clear, planning-backed route to reposition the asset into a high-density, income-producing HMO.

How we helped:

We structured the funding in two coordinated phases with the same lender, creating clear synergies and a straightforward path from development to investment:

• Phase 1 – Conversion Finance:
  – Refinanced the client’s existing small bridging facility.
  – Secured a maximum conversion facility to cover both the refinance and full conversion costs.
  – Ensured the facility aligned with the build programme and drawdown requirements.
• Phase 2 – Long-Term Investment Finance:
  – On completion of the works and stabilisation of the asset, we arranged an internal refinance with the same lender.
  – Structured the borrowing at around £1.5m in total, allowing the client to extract capital at the back end.
  – Transitioned the facility onto a long-term investment basis, appropriate for a fully converted 19-bed HMO.

By using a single lender across both stages, we reduced execution risk, avoided duplicated fees and valuation costs, and created a clear, pre-agreed pathway from conversion through to long-term hold.

The Outcome:

The client successfully:

• Refinanced their original bridge.
• Completed the conversion of a former pub into a 19-bedroom HMO.
• Executed an internal refinance with the same lender to move onto long-term investment finance at c. £1.5m.
• Released capital at the end of the project while retaining a fully converted, high-yielding HMO asset.

The combined approach delivered a smooth funding journey from start to finish, with one lender supporting both the development phase and the long-term investment position.