Property Refurbishment Finance

Pre-credit crunch it was very easy to get finance from a high street bank for the refurbishment of a property that wasn’t mortgageable. The banks would offer you a percentage of the cost of refurbishment and the purchase price. After the economic crisis this finance vanished with the void being taken over by bridging financing for both light refurbishment and heavy refurbishment.

Light Refurbishment

A light refurbishment is where a property needs decorating, new flooring, new bathroom and new kitchen. If there’s anything that needs planning consent or there’s a structural problem, then it’s classed as heavy refurbishment.

Heavy Refurbishment

The definition differs from lender to lender. It could be a percentage cost like works being finished costing nothing more than 15% of the value of the property. Or where planning or structural work is required such as change of use, internal reconfigurations, loft conversions and extensions.

What Can It Be Used For?

  • Converting commercial property with full planning consent to residential although reduced 65% LTV
  • Conversion of a single let unit to HMO
  • Title Splitting

Fees & Rates


There are a number of different fees you will need to pay when applying for refurbishment finance.

  • Arrangement fees typically are 1.5-2% of the loan amount, this fee is charged by the lender for arranging the loan.
  • Valuation fees are used as part of the risk assessment and application, a surveyor will value the property before and after the refurbishment works, and the amount of fees charged all depend on how small or huge the project is.
  • Not every lender uses exit fees, exit fees are charged at the end of the term of the loan.


The rates you will be paying will depend on whether you are selling your property once the refurbishment works have been completed or you are planning to keep the property post refurbishment. For light refurbishments rates can be as low as 5.5%, with heavier refurbishments having greater rates.