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We work with trusted brokers to give you access to a panel of leading lenders well placed to meet your needs at the lowest rates.
If you are looking for a refurbishment loan to upgrade your property and attain higher rental income or asset sale price, Proper Finance can help you get the best rates and terms to suit your requirements.
You can apply for £25,000 to £10 million to be repaid over 1 to 24 months with flexible repayment options and bad credit taken into consideration.
At Proper Finance, we work with some of the best established refurbishment loan providers in the UK and can offer you a free, no obligation indicative quote.
Simply click on the ‘apply’ button where you’ll be asked to enter some basic details before getting an indicative quote.
Can I Borrow a Loan To Refurbish My Property?
Yes, you can borrow a loan to help you refurbish your property. Refurbishment loans are designed specifically for this purpose, acting as a short-term means of finance for borrowers to use when enhancing the appeal of their properties.
Refurbishments to your property can make it more attractive to renters or prospective buyers, and therefore can help to increase its value. You can use them for various different types of refurbishments, from general, light redecorating to adding extensions and loft conversions.
What is a Refurbishment Loan?
A refurbishment loan offers short term finance to facilitate light and heavy refurbishments on your property. It is used by property investors, landlords and developers who want to refurbish or convert their property.
This is done to enhance value of the property before letting or selling the property, allowing a better rental yield or sale price.
Refurbishment loans are available as first and second charge loans secured against the investment property. With first charge refurbishments loans, the loan will be borrowed to purchase a given property and make refurbishments. A second charge refurbishment loan is an additional loan taken out against an existing property.
In both instances the property acts as collateral if the borrower fails to make repayments.
What Can a Refurbishment Loan Be Used for?
Refurbishment loans cover a wide range of the refurbishment market. This spans light redecoration through to large extensions and conversions.
Refurbishment loans are often categorised by the extent of work required. There are two categories of refurbishment loans, these being light refurbishment and heavy refurbishment.
Light Refurbishment Loans
A light refurbishment project only requires small improvements to a property. The work permitted under light refurbishment loans includes the following:
- General redecoration
- Painting
- Plastering
- New electronics
- Flooring
- New windows and doors
- Replacement of bathroom or kitchen
- Replacement radiators
Light refurbishment loans are used for cosmetic changes to a property rather than deeper, more structural changes that can come with heavy refurbishment loans. What’s considered a light refurbishment typically won’t need planning permission, and won’t change how people use the property.
Heavy Refurbishment Loans
Heavy refurbishment loans cover works that require planning permission, structural changes, or will result in a change of use of the property (unlike light refurbishments). Examples of what heavy refurbishment loans can be used for include:
- Adding an extension
- Loft conversion
- Internal reconfiguration (where walls are moved)
Heavy refurbishment projects are generally bigger jobs than light refurbishments, and can take longer to complete.
How Much Can I Borrow for Home Refurbishment?
You can borrow anywhere from £25,000 to £10 million. Typically you can borrow up to 75% of the property value.
Refurbishment loans are designed for short term purposes and are usually paid back when the project is complete. Loan durations tend to range from as little as one month up towards 24 months.
Failing to service the loan payments could result in losing the property.
The rate you pay will be heavily linked to loan to value (LTV), so a larger deposit will mean lower rates.
Who Can Borrow a Refurbishment Loan?
Refurbishment loans can be used by landlords and developers wanting to make their properties more attractive to potential buyers and renters. It’s a type of bridging loan that’s typically paid back with the proceeds earned from the sale of the property.
Refurbishment loans offer a short-term borrowing solution, and therefore are best suited to those who don’t currently have the money for this purpose, but are confident that they’ll be able to pay back the loan on completion of the property’s sale.
There’s also other criteria you may have to meet in order to be eligible for a refurbishment loan. Requirements will vary depending on the lender you use, however, there are some common types of criteria borrowers can be expected to meet.
What is the Eligibility Criteria?
Common requirements for a refurbishment loan include:
- Based in the UK
- Equity in the property (usually 70% LTV preferred)
- The property must not be the borrowers primary residence
- A valuation of the property is required
- Estimated cost of works and exit strategy must be provided
The eligibility criteria for a refurbishment loan varies depending on the lending provider.
Can I get a Refurbishment Loan With Bad Credit?
Yes it is possible to acquire a refurbishment loan with bad credit. However, lenders may offer lower amounts to borrow and charge higher rates to help them reduce their risk of the loan not being paid back.
The loan is secured against the property reducing the risk to the lender. As long as the loan provider feels they have the capacity to repay the loan, they will be willing to provide one for you.
Why Use Proper Finance for Refurbishment Loans?
Proper Finance is a free comparison site that can help people find the best refurbishment loans to meet their needs across the UK. We work with some of the best lenders throughout the UK, who are all regulated, meaning any loan you find through our site is safe and secure.
Working with over 100 fully FCA regulated and authorised lenders, we are able to secure the best rates from award winning providers.
Our online application takes only a few minutes to complete, and once finished offers applicants an instant decision. No fees are incurred.
How to Apply for a Refurbishment Loan
If you’re looking to quickly get a refurbishment loan there are many banks and non-traditional lenders who can help. The process is easy and straightforward.
Simply use Proper Finance’s free comparison site, find the best loan option for you and apply online. The application rarely takes more than 5 minutes. In most cases it takes only a few days for the refurbishment loan to be approved, processed and credited into the borrower’s account once requirements are met.