Light refurbishment mortgages are available for customers looking to refurbish a property, in order for them to then hold it as an investment. Refurbishing properties is one of the best ways to maximise yields from property investment and light refurbishment mortgages are out there.
If a property requires a more substantial refurbishment, for example, needing planning permission, heavy refurbishment mortgages can be provided.
The benefits of these financing solutions are that mortgages can be provided on properties that would otherwise not be granted, due to their condition.
Lenders make the distinction between heavy and light refurbishment mortgages.
From the lenders perspective a light refurbishment property is
- A property that is currently habitable (including working utilities).
- Works need to be undertaken to improve it’s condition. It can then be let out to a tenant, or improved to maximise its value.
- Depending on the lender the works should be completed within 3 to 12 months. The budget should be in the region of 15% to 25% of the purchase price of the property.
- The works should EXCLUDE any planning permission approvals, structural works or work that requires building regulations approval. There should not be any change to the overall use of the property. There is one lender that will consider an exception to this rule as long as there is detailed planning in place. And the applicant must have a track record of similar projects and a high net worth.