Refurbishment Loans

A refurbishment loan is a type of secured borrowing available for developers and landlords looking to improve a property before selling or renting out. Refurbishments could be ‘light’, such as a new kitchen, or ‘heavy’, such as making structural changes.

Lenders have different products and criteria for both light and heavy refurbishment deals which reflects their differing appetite for certain types of projects. For example, we have lenders on our panel who have a very strong interest in community projects or eco-friendly developments. It’s usually short-term and used for smaller projects, such as renovating a bathroom or refurnishing a living room. A refurbishment loan is designed to increase a property’s value, so it’s important to assess whether or not the project you want to undertake is likely to pay off.

Light refurbishments are usually defined as cosmetic changes to a property such as replacing a kitchen, rewiring, or redecorating. By contrast, heavy refurbishments are when structural changes are being made to the property, especially those that may require planning permission.