Call   01206 544333


Property Conversion Loans: Residential House to a Flat or Multi-Unit Block

Flat or MUFB conversion loans explained:
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-configure 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.

Key Features: Property Conversion Mortgage/Loans
  • Typical interest rates and fees – Call our advisers
  • Credit approvals take between 4 to 24 hours
  • Property Conversion Loans from £150,000 to £50 million; subject to affordability and credit criteria
  • Loan to values up to 75% (100% with cross charges) for purchase
  • Loans up to 100% of the cost of the conversion works
  • Payments: interest only / rolled or retained (no monthly payments)
  • Loans Term: 1 to 2 years
  • Purchase / Refinancing
  • No minimum outside income / All income types
  • No previous experience is required but preferred on large, more complex projects (or the appointment of a project manager)
  • All credit histories: High Net Worth to Credit Repair
  • All applicant types: Individuals / Corporate (Ltd Co’s)
  • All tenures: Freehold / Leasehold (no minimum term)
  • EPC-enhanced products are available when improvements to EPC ratings are made.

What types of house to flat conversion projects are eligible for these mortgage loans?

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:

  • Residential House to Flat or MUFB conversions (no limit on the Flats)
  • Commercial Property to Flat or MUFB conversions

When the conversion project has finished, can you arrange a mortgage?

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.


Some lenders have flexible solutions that allow you to acquire the property with bridging loans and then apply for planning. 

Once planning is granted, the lender provides a new loan that includes the facility for the work to be carried out. This saves time and cost for having to change lenders and can be quickly implemented.

Check with the local authority but our understanding is that planning permission is required to convert a house into flats.

Our advisers offer a FREE consultation, so please give us a call or use the “Get in Touch With Us” form at the end of this page.

Advantages of Property Conversion Loans

  • Any property can be funded as long as there is a sound business case and exit strategy (sale or refinance).
  • No limit to the size or complexity of the property or works.
  • Allows investors/developers to maximise cash flow to complete the project quicker.

Disadvantages of Property Conversion Loans

  • Interest rates can be 8% – 12% depending on the size and complexity of the case, but this is because it’s a short-term loan and is a much higher risk for a lender than a buy-to-let or commercial mortgage would be.

How can YOU benefit from our advice?

  • If speed is essential to the transaction, our advisers will prioritise your case to ensure deadlines are met.
  • Our Advisers have expert knowledge when it comes to converting a house into a flat or MUFB.
  • We offer a FREE assessment and have a no upfront fee policy. Our typical fee for 99% of our clients is capped at £395.
  • Want to read what our customers say? Read our testimonialsGoogle reviews.