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Property Conversion & Refurbishment Loans: What is a Schedule of Works?

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This week I was asked by a client “What is a schedule of works and why do lenders require them for a commercial to residential conversion?”

If you are looking at refurbishing or converting a property you may have heard of this term, but what does a schedule of works mean?

Put simply, a schedule of works outlines the works you intend to complete to a property along with the costings of the intended works.

A schedule of works acts as an overview for the project and allows you to keep track of the cash flow.

Why do Lenders Require a Schedule of Works?

Lenders require a schedule of works as they will need to determine the scale of the work and whether the individual has the required experience to complete the work detailed.

A schedule of works is especially key if you are looking to obtain a works-funded facility as this will be used to determine the funds you can raise within the facility.

Upon valuation of the property, this schedule of works is passed to the valuer for their review.

At valuation, the valuer will assess the property in it’s current state and confirm whether the works and their costings outlined are realistic. The valuer will also be able to use the schedule of works to provide a post-works valuation.

What is Required on a Schedule of Works?

Alongside outlining the costings for a project, the schedule of work breaks down the work that will be completed in further detail.

Included within this is the location of the work and the works to be completed, the time scale for completion & the details of the individual completing the works.

The below provides an example of a schedule of works: (Mobile users – turn your phone landscape to view the table below).

Room Works to be completed Anticipated Cost to complete Amount of Contingency allowed Timescale for completion Who will be completing these works? Quote received for these works? Specification: Budget / Average / High
Kitchen New Boiler  £1,500  £500 3-4 months Professional Company Yes Average
Living Room Paint Walls & Ceiling  £100  £50 3-4 months Myself No Average
Dining Room Paint Walls & Ceiling  £100  £50 3-4 months Myself No Average
Kitchen Rip out & fully replace  £2,000  £500 3-4 months Myself No Average
Stairs Paint Walls & Ceiling  £100  £50 3-4 months Myself No Average
Bedrooms Remove furniture, repair walls & repaint  £300  £100 3-4 months Myself No Average
Upstairs Bathroom Rip out & fully replace  £1,000  £500 3-4 months Myself No Average
Downstairs Bathroom Rip out & fully replace  £2,000  £500 3-4 months Myself No Average
Total Spend  £7,100  £2,250

How Can a Schedule of Works Benefit You?

The main benefit of a schedule of works is it allows you to manage the project efficiently, the reason for this is you have a pre-determined plan of cost along with a contingency. Therefore, you are able to keep track of progress and overall manage the project more efficiently.

A schedule of works can also benefit you upon a subsequent refinance of a refurbishment or conversion.

The reason for this is, thanks to the schedule of works, you can provide evidence to a lender and their valuer, for why a property has had an uplift in value since its original purchase.

The benefit of being able to evidence this uplift in value is; upon this refinance, you could potentially capital raise and release the funds that you originally invested into the property.

Where can I Find a Schedule of Works Template?

We have a schedule of works template which is acceptable to most lenders. This template can be downloaded by clicking the following link Schedule of Works

How Can Advocate Finance Help?

Advocate Finance are experts in arranging funding solutions for refurbishment and conversion projects. With 160 lending partners, we have access to a comprehensive range of products that can benefit you and your refurbishment/conversion project.

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Please contact me directly for more information, or use the Get in Touch With Us Today feature at the bottom of this page.

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