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Property Refurbishment Loans – Light Works

What is a Property refurbishment loan

These loan are available for what lenders class as either light refurbishment works or heavy refurbishment works. On this page, we are going to specifically focus on the property refurbishment loans for light refurbishment.

Property refurbishment finance is available for customers looking to refurbish a property, in order for them to then hold it as a buy to let investment or to re-sell in order to make an instant profit.

Refurbishing properties and adding capital value to the property post works is one of the best ways to maximise income and yields from property investment and property refurbishment loans are the best financing solutions in the market if you want speed, flexibility and ease of access.

If a property requires a more substantial refurbishment, for example, needing planning permission, property refurbishment for heavy refurbishment can be provided.

The main benefits of these financing solutions are that property refurbishment finance can be provided on properties that would otherwise not be granted, due to their poor condition and not being in a liveable or lettable condition.

Is it difficult to obtain a property refurbishment loan?

The simple answer is No – subject to project viability and experience. We are arranging property refurbishment finance for all types of clients. The key question a lender asks is the project viable. What this means is when you factor into account the purchase price, the acquisition costs (stamp duty and legal fees), the cost of works to refurbish the property and the financing costs does it make a property! If it does then lenders are very happy to provide property refurbishment finance.

Example:

Purchase price £200,000 Stamp duty/legal costs £6,000 Cost works £30,000 Financing costs £9,000

End value of the property post works is £280,000. Therefore the profit is £35,000 and the project is viable and is suitable for a property refurbishment loan

What experience do you need to prove to the lender

It depends on the type of works you plans to undertake. This page is specific to properties needing property refurbishment finance for light works. The terms “light works” varies from lender to lender but generally, they are works that require no planning permission or structural work.

Can’t I just obtain a normal buy to let mortgage which is cheaper than a property refurbishment loan?

Some of our clients ask us this question. The answer depends on a number of factors. Firstly what is the condition of the property being subject purchased or refinanced. If it is not in a lettable condition then a lender that offers a buy to let mortgage will not provide deem the property to be suitable security and will not proceed with the application at which time you have wasted a valuation fee which could have cost several hundreds of pounds.

Sometimes a property is in a lettable condition but is not modernised and therefore not maximising its rental income potential. It could be that you could secure a buy to let mortgage on the property but the rental income as assessed by the valuer could mean you need to put down a larger deposit than with a property refurbishment loan.

No – it doesn’t need to be perfect. Small late payments for loans or credit cards are accepted if an explanation can be provided for them.

Mortgage arrears are more serious from a lender’s perspective but again but if a solid explanation can be provided we have been able to still arrange a loan.

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Important Information
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

We are a credit broker not a lender.

Advocate Finance Ltd, registered at 55 Crown Street Brentwood, Essex CM14 4BD. Company Register number is 05579380. Authorised and Regulated by the Financial Conduct Authority. Our FCA registration number is 592830.

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We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority.