Bridging finance · UK wide
Refurbishment Bridging Loans
One facility that buys the property and funds the works. Light refurbishment to 75% LTV with works in arrears; heavy refurbishment to 75% LTGDV with staged drawdowns. From £75k to £5m, 3 to 24 months.
Schedule of works: typical criteria
What a bridging loan for refurbishment actually funds
A refurbishment bridging loan is two facilities in one wrapper. The purchase element completes the acquisition, sized against the day-one value of the property. The works element funds the schedule of works, released either in arrears (you spend, the lender reimburses against evidence) or in staged drawdowns signed off by the lender's surveyor. Interest is normally retained from the advance, so nothing is paid monthly during the works.
The structure matters because it protects both sides. The lender never advances works money ahead of the value being created, and you never pay interest on money you have not yet drawn. On a typical light refurb the works element adds two to four weeks of admin over a standard bridge; on heavy projects the QS process is more involved and we manage it for you.
Light and heavy projects sit on different lender panels
Almost every bridging lender does light refurbishment. Far fewer fund heavy works, and the ones that do vary widely on how much of the works they fund, how they stage drawdowns and how they treat planning risk. This is where a specialist broker earns the fee: the cheapest headline rate is frequently not the cheapest facility once drawdown mechanics and QS fees are counted.
- Light refurbishment finance: cosmetic and non-structural works, no planning required.
- Heavy refurbishment finance: structural works, planning, change of use, conversions.
A worked example: 3-bed terrace, light-to-moderate refurb
Worked example
Purchase of a tired 3-bed terrace at £180,000 with a £40,000 schedule of works (kitchen, bathroom, rewire, redecoration) and a £265,000 end value, exiting to a buy-to-let remortgage.
Figures
Indicative figures for illustration only. Lender criteria vary and every figure is confirmed in a formal offer. The exit refinance here repays the bridge in full and returns the majority of the investor's cash.
Exit strategies: how refurbishment bridging loans get repaid
Every application is really an underwrite of the exit strategy. Two exit strategies dominate refurbishment projects: sale of the finished property, or refinance onto a term mortgage at the improved value. Landlords running buy-refurbish-refinance typically exit to a buy-to-let product, and we test that refinance against live criteria before the bridging loan completes. Where a project grows beyond refurbishment (a conversion that becomes a development), development exit finance replaces the bridge at completion of the works, releasing capital while unsold units sell. Whatever the route, the exit is planned on day one, not discovered at month nine.
The same structures apply to commercial refurbishment projects: offices, retail and mixed-use buildings being upgraded or repositioned borrow on identical mechanics at slightly lower leverage, and commercial landlords use works-in-arrears bridging loans the same way residential investors do.
Getting a refurbishment bridge approved first time
Three documents decide most applications: the schedule of works with realistic costings, the evidence behind your GDV, and your (or your contractor's) track record. Weak versions of any of the three produce either a decline or a facility priced for risk you do not actually carry. We rebuild these documents with you before you apply, and we only submit to lenders whose criteria the deal already meets. For the classification questions that decide which panel you are on, our light vs heavy refurbishment guide covers where lenders draw the line, and the costs guide itemises every fee on refurbishment loans before you commit.
Refurbishment bridging loan questions
A standard bridge funds a purchase against current value and expects the property back in the same condition. A refurbishment bridge funds the purchase and the works: the lender underwrites your schedule of works, releases works money during the term, and on heavy projects sizes the whole facility against the end value (GDV) rather than the day-one value.
Yes, on most light refurbishment bridges the works element is funded at up to 100% of cost, released in arrears: you complete a stage, the lender inspects or takes evidence, and reimburses. You still need deposit money for the purchase element, typically 25% of the purchase price plus fees.
You fund each stage of works from your own cash first, then the lender reimburses against evidence, usually within days of each inspection. You therefore need working capital for the largest single stage, not for the whole schedule. On staged-drawdown heavy facilities the same logic applies per drawdown tranche.
Two exits dominate: sale of the finished property, or refinance onto a term mortgage at the improved value. Lenders test the exit at application: for a sale they look at comparable evidence for the GDV; for a refinance they want the end rental income to support a plausible buy-to-let mortgage. We stress-test both before submitting.
Yes. The majority of refurbishment bridges we arrange are to SPV limited companies, usually with personal guarantees from the directors. Pricing is broadly the same as personal borrowing, and the SPV route usually suits investors planning to refinance onto a limited company buy-to-let mortgage.
Most lenders will extend, but extension fees and elevated rates make it expensive, so we build headroom into the original term instead. A 6-month schedule of works gets a 9 or 12-month bridge. If an overrun does happen, talk to us before the term expires: a managed extension or a re-bridge is always cheaper than a default rate.
Talk to us about your project
Tell us the property, the schedule of works and the exit. We will come back with indicative terms, usually the same working day.