Home renovation and remodelling loans

Home renovation financing: bridging loans as a solution

Before and after picture of a home renovation using a home remodelling loan

Driven by a desire for enhanced comfort, increasing property value and evolving lifestyles; homeowners and investors are increasingly looking to home renovations and home remodelling loans. In 2024, 32% of UK property owners plan to undertake major renovation projects over the next year. With high-interest rates, it is predicted a growing number of homeowners and investors will renovate their current properties to better suit their current and future needs rather than committing to an expensive and uncertain move.

However, the cost of property improvement can be very substantial. Such expenses can often present a formidable financial hurdle to investors and homeowners alike. While traditional financing avenues exist, they often fall short on expectations, leaving brokers and homeowners searching for a more purpose-built solution.

Where conventional loans stumble

Traditional home improvement loans, burdened by rigid structures and lengthy approval processes, can feel ill-equipped to tackle the unique challenges of renovations. Their often-modest lending caps and months-long processing timelines prove inadequate for financing ambitious projects on tight timelines. Furthermore, extending existing mortgages can incur substantial fees. They also land homeowners with additional long-term financial commitments – an unappealing prospect for those seeking a fast, flexible solution.

The power of bridging loans

Bridging loans can be a very useful tool for home renovation projects. These loans offer a swift and adaptable financial lifeline for ambitious or modest renovation projects. Their unique characteristics address the limitations of traditional financing head-on.

Our light refurbishment loans are available for funding projects not requiring planning permission. These loans are available from £250,000 to £3.5M and are perfect for improving existing buildings prior to letting or selling. A light refurbishment loan is an excellent alternative to other financial instruments for the purpose of light renovations. Some of these benefits are outlined below:

Speed of access

One frustrating characteristic of obtaining mortgages and other bank loans is the sluggishness of the process. Alternative Bridging’s loans boast lightning-fast approval timelines, securing funds significantly more quickly than those of a high street bank. This quick access ensures projects commence without costly, stressful delays, keeping renovation schedules on track and minimising disruptions.

Short-term flexibility

Unlike the constraints of long-term commitments, bridging loans provide temporary financial support, typically spanning 6-24 months. This timeframe usually aligns perfectly with the duration of most renovations, alleviating the burden of long-term debt and minimising accrued interest.

Unlocking greater potential

Bridging loans allow your client to unlock doors that conventional loans leave firmly shut. Their impressive loan-to-value ratios of 70% compared to the lower ceiling of most home improvement loans, translates to higher borrowing potential. This empowers homeowners and investors to tackle more ambitious projects.

Enhanced security

Unlike traditional loans that may lock down existing properties as collateral, bridging loans can leverage future purchases as security. This innovative approach offers

both borrowers and brokers a greater sense of financial security and peace of mind during the renovation journey.

Alternative Bridging Loans

We offer a number of bridging loans to suit your client’s requirements, including residential, commercial, regulated and light refurbishment loans. Our bridging loans are available for up to 24 months and can be used to raise short-term finance on different types of properties.

In 2024, home renovations are far more than surface-level improvements; they represent investments in well-being, increased property value, and enhanced lifestyles. Bridging loans, with their unwavering agility, financial muscle, and focus on short-term support, empower brokers to serve their client’s renovation aspirations like never before. By offering flexible home improvement financing options, brokers can unlock new avenues for growth and build lasting client relationships.

If you have any questions about using a bridging loan for home renovation projects, please contact us to see how we can help. Alternatively, give one of our experienced BDMs a call on 020 8349 5190 to discuss your bridging loan requirements.

We look forward to hearing from you.