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Property Refurbishment Finance
- Access flexible refurbishment finance for renovation projects of all sizes and complexities.
Questions
What is Property Refurbishment Finance?
Property refurbishment finance is a short-term loan designed to help property investors, landlords and developers fund the cost of renovating or improving a property before selling, letting, or refinancing it. It fills a gap that conventional mortgages often can’t: most high-street lenders won’t fund an uninhabitable property, missing a kitchen or bathroom, or otherwise in a condition that falls outside standard mortgage criteria.
The loan is typically secured against the property itself, with the amount available based on its current value, the cost of the planned works, and its expected value once the refurbishment is complete. This means you can often borrow more than the property’s existing condition alone would support, because lenders are lending against its future potential as well as its present state.
Refurbishment finance covers two broad categories: light and heavy. Light refurbishment is for cosmetic or non-structural work — new kitchens and bathrooms, rewiring, redecoration, or replacing windows — that doesn’t require planning permission or building regulations approval. Heavy refurbishment covers more substantial projects involving structural changes, extensions, or a change of use, where planning consent and building regulations sign-off are required.
The loan is usually released either as a single lump sum or in stages as the works progress, depending on the lender and the scale of the project. Interest can typically be paid monthly, rolled up into the loan, or deducted upfront, giving borrowers flexibility around cash flow during the works.
As with most short-term property finance, the exit strategy is central to any application. Lenders want a clear plan for how and when the loan will be repaid — whether that’s through selling the improved property, refinancing onto a standard mortgage once the works are complete, or another route. A well-defined project scope, realistic costings, and a credible exit are usually the difference between a smooth application and a difficult one.
Product Features Include:
- Available for residential, commercial properties, and land assets
- Open to individuals, companies, LLPs, offshore entities and pension funds
- A quick decision in principle
- Applicable in England and Wales
- Flexible interest options: rolled up, retained, or deducted
- Adverse credit accepted, subject to the underwriter’s approval
Case studies
Some of our projects
Land Bridge for 220 Apartments
£10,400,000
Airspace Development
£1,200,000
CBILS Refinance for 4 Detached Houses
£3,400,000
Enquiry to Completion in 4 weeks
£3,600,000
our team
team of experts
FAQs
Common Questions & Answers
What Is The Difference Between Refurbishment And Renovation?
It’s a question we get asked a lot, and understandably so — the two terms are often used interchangeably, even though they mean quite different things when it comes to financing your project.
Refurbishment is about restoring a property so it can be lived in comfortably again. Think new kitchens and bathrooms, rewiring, redecorating, replacing a tired boiler, or fixing up windows and flooring. It’s essentially bringing a property back up to a good standard without fundamentally changing its layout or use.
Renovation, on the other hand, usually goes a step further. It tends to involve some level of structural change or reimagining of the space — knocking through walls, converting a loft, extending the footprint, or changing how a building is used altogether. Because of this, renovation projects are far more likely to need planning permission and building regulations sign-off before work can start.
Here’s a simple way to think about it: if you’re improving what’s already there, that’s refurbishment. If you’re changing what’s there, that’s renovation.
Some common examples of renovation include:
- Loft or basement conversions
- Extensions
- Turning a single house into multiple flats
- Combining rooms or reworking a floorplan
- Changing a commercial building into residential use
This distinction matters more than you might think when it comes to finance. Refurbishment finance is generally geared towards lighter, non-structural work and tends to be quicker to arrange, since the risk profile is more straightforward. Renovation projects, because they’re more complex and often require formal planning consent, are more likely to fall under development finance instead — which is structured differently, with funds typically released in stages tied to build progress.
If you’re not sure which camp your project falls into, that’s fine — plenty of projects sit somewhere in the middle. A quick conversation with one of our team can help clarify which type of finance actually fits what you’re planning, rather than you having to guess and risk applying for the wrong product.
How Much Can I Borrow For A Property Refurbishment?
This is usually the first question on everyone’s mind, and the honest answer is: it depends on a few key factors, rather than being a fixed figure.
Lenders typically base the loan amount on three things: the property’s current value, the cost of the planned works, and — importantly — what the property will be worth once the refurbishment is complete. This last point is what makes refurbishment finance different from a standard mortgage. Because lenders are lending against the property’s future value as well as its present condition, you can often borrow more than the “as is” value alone would allow.
Loan-to-value (LTV) is the other piece of the puzzle. Lenders will typically lend a percentage of the current value, plus a separate percentage towards the cost of works, up to an agreed maximum based on the projected end value. The exact ratios vary from lender to lender, and depend heavily on the scope of the project — a light cosmetic refresh is treated differently to a heavy structural refurbishment.
Your own experience as a borrower can also play a part. First-time refurbishers aren’t ruled out, but a track record of completed projects can sometimes unlock better terms or higher borrowing limits, since it gives lenders more confidence in your ability to deliver the work on time and on budget.
Because every project is different, there’s no single number that applies across the board. The best way to get a clear picture is to talk through your specific project — the property, the scope of works, and your intended exit — so we can match you with lenders whose criteria actually fit what you’re trying to do, rather than working off a generic estimate.
How Is a Refurbishment Loan Repaid?
Refurbishment finance is short-term by nature, so lenders will want a clear answer to this question before they approve anything: how, exactly, are you planning to pay the money back?
There are typically three main routes. The first is selling the property once the works are finished — common with fix-and-flip projects, where the plan from day one is to refurbish and sell on for a profit. The second is refinancing onto a standard buy-to-let or residential mortgage, which suits landlords and investors planning to hold onto the property and let it out once it’s back up to standard. The third is repaying through other funds or income, such as the sale of another asset or business proceeds, though this is less common.
Whichever route applies, lenders refer to this as your “exit strategy,” and it’s one of the most important parts of your application — arguably as important as the property itself. A vague or unrealistic exit is one of the quickest ways to have an application turned down, so it’s worth thinking this through properly before you apply, not after.
In terms of how the loan itself is structured, interest is usually handled in one of three ways: paid monthly throughout the term, rolled up and added to the loan (so nothing is paid until the end), or deducted upfront from the amount you receive. Each option affects your monthly cash flow differently, so it’s worth weighing up which suits your project and finances best.
Most refurbishment loans run for a matter of months rather than years, with the full balance due at the end of the term. If your project overruns or your exit takes longer than expected, it’s usually possible to arrange an extension — but this should be discussed with your lender as early as possible, rather than left until the deadline is looming.
What Happens If My Refurbishment Costs More Than Expected?
Cost overruns are one of the most common — and most stressful — realities of any refurbishment project. Hidden issues like damp, faulty wiring, or structural problems often only come to light once work is underway, and material or labour costs can shift too. It’s worth planning for this possibility from the outset, rather than being caught off guard if it happens.
The first thing to say is that you’re not alone if this happens, and it doesn’t automatically derail your project. What matters most is how quickly you flag it and how you handle it from there.
If your loan is being released in stages, speak to your lender as soon as you’re aware costs are rising, rather than waiting until you’re further into the project or have run out of funds. Most lenders would far rather have an early conversation than be presented with a shortfall halfway through the works. Depending on your lender and the size of the increase, it may be possible to arrange additional funding on top of your existing facility, though this isn’t guaranteed and will depend on the project’s viability and your equity position.
This is exactly why building a contingency into your budget from day one is so important. A common approach is to set aside an additional 10-20% of your projected costs as a buffer, so unexpected expenses don’t immediately put your project — or your ability to repay the loan — at risk.
It’s also worth having a frank conversation with your broker or lender before work even starts, so you understand what flexibility (if any) exists within your facility should costs rise. Knowing your options in advance, rather than scrambling to find them mid-project, makes a real difference if things don’t go entirely to plan.
When Should I Use Refurbishment Finance Instead of Development Finance?
This is one of the most common points of confusion we come across, and getting it right matters — applying for the wrong type of finance can slow your project down or lead to a rejected application further down the line.
As a general rule, refurbishment finance is the right fit when you’re improving an existing property without fundamentally changing its structure or use. New kitchens and bathrooms, rewiring, redecoration, re-roofing, or general modernisation all fall into this category. The property stays recognisably the same building — just brought up to a better standard.
Development finance, by contrast, is geared towards projects that go further: ground-up builds, major structural alterations, extensions, loft or barn conversions, or converting a property into multiple units. These projects are more complex, usually require planning permission, and often involve a longer build programme with funds released in stages tied to construction milestones.
A useful way to think about it: if you’re asking “how do I fix this property up?”, you’re probably looking at refurbishment finance. If you’re asking “how do I turn this into something different?”, that’s more likely development finance territory.
That said, plenty of projects sit in a grey area — a heavy refurbishment with some structural work, for instance, might technically qualify for either, depending on the lender and the scale involved. In these cases, the right answer often comes down to how the lender assesses risk on your specific project, rather than a hard-and-fast rule.
If you’re not sure which category your project falls into, it’s genuinely worth a quick conversation before you apply. Getting matched with the right product from the start saves time, and means you’re only submitting your application to lenders whose criteria actually fit what you’re planning to do.
Is Refurbishment Finance Available for Auction Purchases?
Yes — and it’s actually one of the most common ways refurbishment finance gets used. Auction properties are often sold precisely because they need work: they might be uninhabitable, missing a kitchen or bathroom, or otherwise unable to meet standard mortgage criteria. That makes them a poor fit for conventional lending, but a natural fit for refurbishment finance.
The catch with auctions is speed. Once the hammer falls, you’re typically committed to completing within 28 days — a tight window that rules out most high-street mortgages, which can take weeks or months to arrange. Refurbishment finance, particularly when structured as a bridging facility, is built for exactly this kind of timeline, with lenders geared up to move quickly and assess the property on its current and post-works value rather than getting stuck on its present condition.
There’s also a practical advantage: because refurbishment lenders are used to dealing with properties in poor condition, they’re generally more comfortable valuing a place that needs significant work than a standard mortgage lender would be. This means you’re less likely to have your finance held up by a property failing to meet typical lending criteria.
The usual approach is to secure funding for the purchase first, then either draw down further funds for the refurbishment works or arrange a separate facility once you own the property — the exact structure depends on the lender and how the deal is put together. Some lenders can combine purchase and refurbishment costs into a single facility from the outset, which simplifies things considerably.
If you’re planning to buy at auction, it’s worth having your finance lined up — or at least a lender identified — before you bid, rather than after. With such a tight completion deadline, sorting this out in advance is what makes the difference between a smooth purchase and a stressful scramble to complete on time.
Who Can Apply for Property Refurbishment Finance?
The good news is that refurbishment finance is available to a fairly broad range of borrowers, not just seasoned developers. Whether you’re an experienced investor or taking on your first project, there’s usually a lender out there whose criteria fit your situation.
Property investors and landlords are among the most common applicants — typically looking to update a tired buy-to-let before selling or refinancing, or bringing a property up to a lettable standard. Fix-and-flip investors are another core group, buying properties that need work with the specific intention of refurbishing and selling on for a profit.
First-time refurbishers are also welcome to apply. You don’t need a long track record to get started, though it’s worth knowing that experience can sometimes open the door to better rates or higher borrowing limits, since it gives lenders more confidence in your ability to see the project through. If this is your first project, a realistic budget and a clear plan will go a long way towards reassuring a lender.
Limited companies and SPVs (special purpose vehicles) can apply too, which is common among more established investors who structure their property purchases this way for tax or liability reasons. Beyond individual investors, refurbishment finance is also used by developers taking on smaller-scale projects that don’t warrant a full development finance facility, as well as homeowners looking to fund significant work on a property they intend to live in themselves.
What matters most to lenders isn’t necessarily your background, but the strength of the application as a whole — the property, the scope and cost of the works, and a credible exit strategy. If you’re unsure whether your circumstances fit, it’s worth having a conversation rather than assuming you don’t qualify, as lending criteria vary considerably from one lender to the next.
Can I Get Refurbishment Finance for a Buy-To-Let Property?
Yes — this is one of the most common uses of refurbishment finance. Many landlords use it to update a tired rental property before re-letting or refinancing, whether that’s a light cosmetic refresh or more substantial work to bring a property up to modern rental standards.
It’s also a popular route for landlords looking to improve a property’s energy efficiency. With EPC requirements for rental properties becoming an increasingly pressing issue, refurbishment finance is often used to fund upgrades like insulation, new heating systems, or double glazing, helping landlords meet current standards without dipping into cash reserves.
The usual plan is to complete the works, then either refinance onto a standard buy-to-let mortgage once the property is in a lettable condition, or continue letting it under the refurbishment facility before switching over. Lenders will want to see a clear plan for this transition as part of your application.
Whether you own the property personally or through a limited company or SPV, refurbishment finance can typically accommodate either structure — though the lenders available, and the exact terms on offer, will vary depending on how you hold the property.
