Light refurb vs heavy refurb
These are two distinct products with different lenders, different processes and different rates. Knowing which you need matters.
Cosmetic and non-structural work
For properties that need updating but are structurally sound. Works do not require planning permission or building regulations sign-off.
- New kitchen and bathroom
- New windows and doors
- Redecoration throughout
- Flooring and lighting
- Garden landscaping
- Boiler and heating system replacement
Structural and conversion work
For properties requiring structural works, change of use, or projects that need planning permission or building regulations approval.
- Structural wall removal
- Loft conversions
- Commercial-to-residential conversion
- HMO or flat conversion
- Extension and reconfiguration
- Full gut-and-rebuild refurb
Light vs heavy refurb at a glance
| Feature | Light Refurb | Heavy Refurb |
|---|---|---|
| Planning permission needed? | No | Often yes |
| Structural works involved? | No | Yes |
| Funds released | Day 1 in full | Staged drawdown |
| Site monitoring required? | No | Yes (lender monitors) |
| Rates (per month) | From 0.55% | From 0.75% |
| Maximum LTV / LTC | Up to 75% LTV | Up to 70% GDV |
| Typical term | 3–12 months | 6–24 months |
| Build cost funded | No (purchase only) | Yes (up to 100%) |
Buy, refurb, sell or refinance
A well-structured refurbishment loan lets you capture the full value of the project. Here is how the typical cycle works.
Source the property
Identify a property below market value due to condition. Auction, off-market, or agent.
Arrange finance
We arrange a refurb bridging loan covering the purchase, with a facility for build costs drawn down in stages.
Complete the works
Your contractor works through the project. The lender monitors progress and releases drawdowns as each stage is signed off.
Sell or refinance
Once complete, either sell at the improved value, or refinance onto a standard buy-to-let or residential mortgage at the new valuation.
Repay the bridge
The bridging loan is repaid from sale proceeds or the remortgage. Interest only accrued for the months the loan was held.
Real refurbishment deals we have arranged
Victorian terrace: buy cheap, refurb and sell
A run-down terrace bought below market value. New kitchen, bathroom, windows, and full redecoration. Refinanced onto a buy-to-let at £195,000 six months later, releasing £45,000 of equity.
Office-to-residential conversion to six flats
A former office with permitted development rights for six flats. We arranged staged development finance covering 80% of purchase and 100% of build costs. Exit via individual flat sales.
Three-bed to seven-room HMO in Preston
A standard three-bed converted to a seven-room licensed HMO. Heavy refurb loan covered purchase and works. Refinanced onto a specialist HMO buy-to-let at completion with an improved rental yield of 14%.
Common questions about refurbishment finance
For heavy refurb and development loans, the lender does not release all the money on day one. Instead, they release funds in tranches that align with stages of the build. For example, you might receive the first drawdown on purchase, then subsequent drawdowns when the structure is complete, first fix is done, and on practical completion. A surveyor or monitoring agent may visit the site before each release to confirm progress.
Yes, for heavy refurbishment and development projects. Lenders will typically fund up to 100% of build costs (capped at a percentage of GDV, usually 60–70%). For light refurb loans, the loan is usually against the purchase price only, with the refurb funded from your own capital or retained equity.
GDV stands for Gross Development Value, the projected market value of the property once all works are complete. Lenders use GDV to cap how much they will lend on a project. A typical cap is 65–70% of GDV. So on a project with a £400,000 GDV, a lender would advance up to £260,000–£280,000 in total (purchase plus build costs combined).
Not necessarily. For light refurb, planning is not required. For heavy refurb involving change of use or structural works, some lenders will advance funds prior to planning being granted (usually at a lower LTV), with the full facility available once permission is secured. For permitted development rights conversions, the rights themselves substitute for planning in many cases.
The two most common exit routes are selling the completed property (capturing the full uplift in value) or refinancing onto a standard buy-to-let or residential mortgage at the improved post-works valuation. Lenders need a credible exit in place from the outset. We will help you identify the most appropriate route and structure the finance to match it.