Refurbishment Finance

What is Refurbishment Finance?

Refurbishment finance, also known as renovation or refurbishment loans, are a type of financing specifically designed to fund the renovation or improvement, and purchase of property.

We find this type of financing is commonly used by property developers, investors, or homeowners who want to renovate and upgrade, residential or commercial property, to increase its end value whilst making it more suitable for their needs.

The work itself can be anything from light cosmetic upgrades, through to heavy structural repairs, extensions or full conversions. Depending on the requirements, we can source finance for the purchase, the development costs and long-term finance options once works are complete. We have specialist tools to help appraise our clients’ projects from the start, which will help outline which lenders should be considered and the viability of your scheme.

Loan Information

  • Refurbishment Finance is a unique product in that lenders will offer an opportunity to acquire funding to complete all required works as well as purchasing the property itself.
  • The funding for the works is paid in arrears so there is an expectation for the client to have some cash flow to begin the project themselves.
  • This lending assumes that the work completed will lead to an increased end value of the property and therefore protect the investment.
  • As a result, where the refurbishment work is funded, the lenders will generally insist upon an Asset Manager/Monitoring Surveyor to sign off works throughout the scheme to ensure the money is being used for its intended purpose.
  • This requirement comes with some cost implications. The lenders will charge a fee for the initial report, outlining the costs of the refurb itself, which will need to be completed prior to the purchase.
  • The lender will also stipulate pre-agreed site visits throughout the scheme (typically 2-4) which are chargeable and will dictate when funds can be released.
  • Where possible we advise our clients to opt for a lender who uses an Asset Manager, as this is typically cheaper than a Monitoring Surveyor.

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Useful Information

Take a look at our Useful Information section for some extra guidance and insights about what you are requesting.

Type of Facilities

Maximum Funding – Funding the Purchase & The Works

  • Purchase – Typical lend, up to 75% of the purchase price/value
  • Refurb – Up to 100% funding of the works (loan size here cannot amount to more than 75% of the end value of the scheme).
  • Monitoring – Required

Purchase Loan – Customer Funds the works themselves

  • Purchase – Typical lend, up to 85% of the purchase price/value
  • Refurb – Self funded
  • Monitoring – Not required, making this product ideal for developers in a strong cash position who don’t want the interference or cost of lender monitoring throughout the scheme

Conversion, Extensions and Refurbishment of £1m+

  • Purchase – Typical lend, up to 75% of the purchase price/value
  • Refurb – Up to 100% of the works (loan size here cannot amount to more than 75% of the end value of the project)
  • Monitoring – Required

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