Heavy Refurbishment Loans: Fund Your Property Transformation
Want to take on a substantial property project?
Our Heavy Refurbishment Bridging Loans provide the financial support you need to turn your plans into reality.
From converting commercial spaces into residential units to developing large HMOs or undertaking extensive renovations, we offer flexible funding solutions for ambitious property projects.
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What Are Heavy Refurbishment Bridging Loans?
Heavy Refurbishment Bridging Loans are short-term loans designed for property developers and investors undertaking major renovation projects.
These bridging loans support transformations that involve structural changes, significant extensions, or complete property overhauls.
Typical projects include:
- Converting office buildings into residential apartments
- Transforming commercial properties into Houses in Multiple Occupation (HMOs)
- Renovating dilapidated buildings
- Large-scale property extensions
Most lenders classify a project as ‘heavy’ refurbishment if the work includes structural changes or costs exceed 20% of the property’s value, though specific criteria may vary between lenders.
Key Features of Heavy Refurbishment Bridging Loans
Heavy refurbishment loans offer several attractive features for property developers and investors. Many lenders provide competitive Loan-to-Value ratios of up to 80% net, maximising borrowing potential for substantial refurbishments. Interest rates typically start from 0.75% per month, helping to keep projects financially viable.
Loan terms often extend up to 18 months, allowing ample time for project completion without undue pressure. Many lenders also offer the flexibility of early repayment without additional charges, which can be advantageous if a project completes ahead of schedule or long-term finance is secured earlier than expected.
For larger projects requiring over £5 million, we can arrange customised pricing structures, supporting even the most ambitious refurbishment plans.
This bespoke approach ensures that financing can be tailored to the specific needs of each project.
Who Can Benefit from Heavy Refurb Bridging Loans?
Property developers can access the capital needed to transform outdated or underutilised properties, maximising potential returns.
Investors looking to expand or upgrade their property portfolios can take on substantial projects with greater potential for profit.
Commercial property owners can also benefit, using these loans to fund the transformation of their properties for residential use or to modernise them for new tenants.
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Eligible Projects
Heavy refurbishment bridging loans can finance a wide range of projects.
Commercial to residential conversions are a common use, transforming office buildings, warehouses, or retail spaces into desirable residential units. These loans support projects requiring extensive structural changes and adherence to residential building regulations.
Large HMO developments, particularly those with 9 or more units, are another key area. Lenders in this space understand the complexities of HMO developments and can tailor their finance offerings to these specific projects.
Substantial property renovations also fall within the remit of these loans. Whether restoring a period property or completely modernising a dated building, heavy refurbishment bridging loans can cover all aspects of the renovation process.
Main Benefits
These specialised loans offer several key benefits.
They provide quick funding for time-sensitive projects, often with decisions made within days. The flexibility inherent in these loans makes them ideal for complex refurbishments, allowing for customised solutions to meet specific project needs.
Many lenders in this space offer expert support throughout the project, providing valuable guidance and insights.
The combination of competitive rates, flexible terms, and tailored solutions makes heavy refurb bridging loans an attractive option for property developers and investors looking to take on substantial renovation projects.
How Heavy Refurbishment Loans Work
These bridging loans are structured to provide substantial funding for major property transformation projects.
They typically offer up to 75% Loan-to-Gross-Development-Value (LTGDV), enabling borrowers to access significant funds relative to the project’s anticipated final value.
Loan amounts usually start from £250,000 and can extend into the millions, and we can offer bespoke terms for loans over £5 million.
This flexibility allows for financing of projects ranging from single property renovations to large-scale commercial-to-residential conversions.
Terms are available from 3 to 18 months, aligning with the timeline of most major refurbishment projects. This duration provides borrowers with sufficient time to complete extensive works without the pressure of an imminent repayment deadline.
One of the key features of heavy refurbishment loans is the drawdown structure.
Lenders typically offer two main options:
- Full drawdown on day one: The entire loan amount is released at the outset, providing immediate access to all funds.
- Staged drawdowns: Funds are released in phases, often monthly or quarterly, in line with project milestones. This approach is similar to how development loans work and can help manage cash flow and reduce interest costs, as interest is only charged on the amount drawn down.
Most lenders structure these loans on an interest-only basis, with the interest either serviced monthly or rolled up and paid at the end of the term along with the principal. This interest roll-up option can be particularly useful for projects where there’s no immediate rental income to service the debt.
To manage risk and ensure project success, lenders can implement a monitoring process. This involves regular site inspections conducted by an internal asset manager or an independent quantity surveyor. These professionals oversee expenditure, monitor progress, and may need to approve each drawdown stage in a phased funding arrangement.
As always, the exit strategy is a crucial component of how these loans work.
Lenders will want to see a strong, viable plan for repaying the loan at the end of the term.
Common exit strategies include:
- Sale of the refurbished property
- Refinancing onto a long-term mortgage product
- Sale of individual units in a multi-unit development
Some lenders offer the flexibility of no early repayment charges, allowing borrowers to exit the loan ahead of schedule if their project completes early or they secure long-term finance sooner than anticipated.
How We Make A Difference
We leverage our extensive network of over 250 lenders to secure the most competitive heavy refurbishment bridging loans.
Our team of experienced brokers understand the intricacies of complex refurbishment projects and work tirelessly to structure deals that align with your specific needs and goals.
contact usFAQ
Most lenders offer terms between 3 and 18 months, depending on the project scope.
Our loans start at £250,000
Our lenders don’t state an absolute maximum, each case is looked at individually. Loans over £5 million can benefit from bespoke pricing.
While rare, some lenders may offer up to 100% funding via cross-charging if you have adequate additional security to offer.
With all documentation in order, some lenders can release funds within 5-10 working days.
The loan is normally secured against the property being refurbished, often as a first charge.
While not always required, experience can help you secure better terms. Some lenders specialise in working with first-time developers.
The type and scope of works will also be relevant.
Yes, these loans are often used for such projects, including office-to-residential conversions.
Most lenders allow early repayment, often without penalties, but always check the specific terms.
Heavy refurbishment typically involves structural changes and costs exceeding 20% of the property value, while light refurbishment is mainly cosmetic, without structural work.
Read more: Light Refurbishment Bridging Loans
While possible, ground-up developments usually require specific development finance rather than refurbishment loans.
