Refurbishment Finance Funding London
Funding from £75,000 up to £25 million
Helping you secure a short-term financial solution to your specific London refurbishment finance funding requirements
Refurbishment Finance Funding London
If you are looking into property refurbishment finance in London, there are a number of options, typical terms, lenders, and things you should consider.
What is refurbishment finance
Refurbishment finance funding is money lent/borrowed to buy and/or renovate a property. It’s useful when a property needs work that prevents getting a regular mortgage (e.g. heavy structural work, uninhabitable condition, conversions/extensions). The finance is often short-term or medium-term, and the exit strategy could be selling, letting, or refinancing into a more standard mortgage or loan once the property is in a better state.
There are two main types of refurbishment finance: light refurbishment loans, used for cosmetic improvements such as new kitchens, bathrooms, or redecorating, and heavy refurbishment finance, which covers major works like extensions, loft conversions, or structural changes requiring planning permission. These loans are usually offered by specialist lenders, bridging finance providers, or private banks.
Typical loan terms range from 6 to 24 months, with borrowing amounts starting from around £25,000 up to several million pounds, depending on the project. Most lenders will finance up to 75% of the property’s value or 90% of refurbishment costs, with interest charged monthly and often “rolled up” to be paid at the end of the loan.
Lenders will assess the Gross Development Value (GDV), your experience level, and your exit strategy, either selling the property for profit or refinancing to a standard buy-to-let or residential mortgage. Given London’s competitive property market, refurbishment finance can unlock opportunities to add value quickly, but careful planning, accurate budgeting, and a clear repayment plan are essential to manage risks and maximise returns.
Types of London refurbishment finance funding clients:
Homeowners
Commercial & Residential Landlords
Buy to Let Investors
Business Owners
Property Developers
Company CEO’s
Refurbishment Finance Funding London
Refurbishment Property Finance in London
London property refurbishment finance is a short to medium-term funding option designed specifically to cover the purchase and improvement costs of a property that is not suitable for a traditional mortgage. Standard mortgages often require a property to be in a habitable state, with essentials like a working kitchen and bathroom. Many London properties that need significant work: for instance, structural changes, extensions, or change-of-use projects, fall outside these criteria. Refurbishment finance bridges this gap, allowing investors to purchase and upgrade a property before refinancing or selling it.
There are generally two categories of refurbishment finance. Light refurbishment finance is aimed at projects involving non-structural improvements, such as redecorating, replacing fixtures, or minor layout adjustments. These projects tend to be lower risk and have shorter turnaround times. Heavy refurbishment finance, on the other hand, is designed for major works like extensions, loft conversions, or projects requiring planning permission and building regulations approval. Lenders offering heavy refurbishment finance often require more detailed project plans, budgets, and timelines.
The structure of these loans is different from a traditional mortgage. Many lenders provide funds in stages, releasing money as the work progresses. Typical loan terms range from 6 to 24 months, although some lenders offer up to 36 months for larger developments. Interest rates are higher than standard mortgages, reflecting the increased risk, and are often charged on a monthly basis. Many lenders offer “rolled-up interest,” meaning payments are deferred until the loan is repaid, which helps with cash flow during the refurbishment process.
Loan amounts vary significantly depending on the lender and the scope of the project. In London, it’s common to see refurbishment finance starting from £50,000, with upper limits stretching into the millions for larger schemes. Lenders typically fund up to 75% of the property’s current value or 90% of refurbishment costs, while also assessing the Gross Development Value (GDV), the estimated value of the property after works are completed.