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Welcome to Advocate Finance, your trusted specialists in securing Property Conversion Loans for transforming residential houses into flats or multi-unit blocks.
Whether you’re an experienced developer or taking on your first conversion project, we provide tailored financial solutions to help you maximise the potential of your property. From planning to completion, our expert team ensures you have the funding you need for a successful project.
These are short-term loans (typically less than 2 years) that provide property investors and developers of all experience levels the funding to purchase (or refinance) a property that is to be converted and re-configured to another type of property. The loan typically comes in two types.
Type 1 – Provides funds to acquire the property but not the cost of the works to convert the property. Interest is retained or paid monthly. These loans can be more suited for smaller loans or where you don’t need the work funded because you have funds available. The lender fees tend to be lower as you do not require a monitoring surveyor.
Type 2 – These loans provide funds to acquire the property, 100% of the cost of conversion works (split into stage payments over the term of the loan) and the interest is added to the loan, so there are no monthly payments.
These loans provide a much higher level of borrowing, and better cash flow as both the works and interest are funded by the lender. These loans do have a higher minimum loan size, and you will also have to pay the fees for the monitoring surveyor to visit the property to verify the works.
These conversion projects typically involve permitted development schemes or projects requiring planning permission, and the properties tend to be empty and/or unmodernised properties.
There is no limit to the type of properties that can be converted, but popular projects include:
When the conversion works have been completed and the property has the necessary building control certificates, Advocate Finance can provide advice and arrange mortgages should you choose to keep and rent the property instead of selling it. This is what most of our property investors undertake to raise capital funds for their next project.
It is beneficial to keep in contact with the adviser that arranged the conversion loan so that they can obtain the mortgage approval a few weeks ahead of the work being completed; it speeds up the process so the refinancing can take place quicker.
Securing a property conversion loan can be more complex than standard mortgages due to the scope of work involved in transforming a house into flats or multi-unit blocks.
Lenders assess factors such as the scale of the project, the property’s current condition, and the anticipated post-conversion value. Detailed project plans, cost estimates, and planning permissions are often required to secure funding.
At Advocate Finance, we simplify the process, connecting you with lenders who understand the unique requirements of conversion projects.
While a bridging loan can be used for certain property conversion projects, it may not always be the most suitable option. Bridging loans are typically short-term solutions designed for quick purchases or light refurbishment, whereas property conversion loans are tailored for large-scale projects involving structural changes or significant reconfigurations.
Property conversion loans are often more cost-effective for longer-term projects, as they provide flexible terms and staged drawdowns to match the progress of the conversion. At Advocate Finance, we help determine the best financing option based on the scale, complexity, and timeline of your project.
When converting a residential house into flats or a multi-unit block, planning permissions and adherence to building regulations are critical. Structural changes, fire safety standards, and zoning laws must be carefully considered to ensure compliance. Failing to secure the necessary permissions can lead to delays or legal complications.
At Advocate Finance, we ensure that your project is aligned with planning requirements, giving lenders confidence in your project’s feasibility.
Advantages | Disadvantages |
Tailored for Large-Scale Projects: Specifically designed to fund projects involving significant structural changes or full property conversions. | Complex Application Process: Securing finance for property conversion often requires detailed project plans, cost breakdowns, and planning permissions, which can be time-consuming to prepare. Planning and Regulatory Requirements: Projects must comply with strict planning permissions and building regulations, adding complexity and potential delays. |
Staged Drawdowns: Funds are released incrementally, matching project milestones and reducing interest costs. | Higher Initial Costs: The upfront costs for structural changes and large-scale conversions are typically higher compared to smaller refurbishment projects. |
Increased Property Value: Converting a house into multiple units significantly boosts its market value, enabling higher resale or rental income. | Market Risks: The success of the project depends on market conditions and post-conversion valuations, which can fluctuate. |
Flexible Exit Strategies: Investors can choose to refinance with a long-term mortgage for rental income or sell the converted units for profit. | |
Wide Property Eligibility: Suitable for various properties, including large residential homes, mixed-use properties, and derelict buildings. | |
Professional Support: Lenders familiar with conversion projects offer tailored financial products, ensuring you get the support needed for success.
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Expertise and Experience
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Yes, planning permission is required for most property conversions. It’s essential to consult with local authorities to ensure your plans meet all necessary building regulations and zoning requirements.
The timeline depends on the scale and complexity of the project, but most conversions take between 6 and 18 months. Financing options such as staged drawdowns can help manage cash flow during this period.
Properties eligible for conversion include large residential houses, derelict homes, and mixed-use properties. These projects often involve reconfiguring internal layouts, creating separate units, and meeting building regulations for multi-unit living.
Staged drawdown financing releases funds in phases as the project progresses. This reduces interest costs since you only pay interest on the funds drawn down at each stage. Lenders typically require milestone verification before releasing subsequent funds.
Our expert team of mortgage brokers are here to guide you through every stage of the process.
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.
You can check via www.fca.org
We are registered with the ICO, Z1654205 and you can check via www.ico.org.uk.
We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority. We source mortgages and loans from a panel of lenders.
We may receive a commission that will vary depending on the lender, product, the amount borrowed or other permissible factors.
Advocate Finance is a mortgage and finance brokerage firm that specializes in securing loans and mortgages for various types of properties, including single properties, large portfolios, commercial sites, and development projects. They assist clients regardless of credit history, circumstances, or legal ownership, aiming to provide tailored financing solutions