In an environment of rising costs, property investors are always keen to identify ways that they can generate better returns from their investments.

One approach that is growing in popularity is buying a run-down property and renovating it to increase its rental value and future sale price. So, what are the options when it comes to loans for property refurbishment?

Property refurbishment loans fall into two main categories – light refurbishment and heavy refurbishment.

Light refurbishment loans are generally used where no planning permission or building regulations are required and there is no change of use to the property. With the upcoming minimum EPC requirements on a rental property, a light refurbishment loan could be used to make a property more energy efficient, perhaps by installing double glazing, replacing the boiler or repairing the roof.

However, it’s often also the case that a property considered uninhabitable or unattractive could be completely renovated with relatively straightforward light refurbishment, providing there is no structural work or planning required.

Common renovations that could be made using a light refurbishment loan include installing a new kitchen or bathroom, replacing flooring, removing internal walls, rewiring, repairing plumbing and decorating. Finishing a property to a high standard will put it in the strongest possible position to achieve the best price for a future letting or sale.

Heavy refurbishment loans are used where the building work is more involved, often involving structural changes to the property that require planning permission or building regulations. The returns on a successful heavy refurbishment project can justify this additional effort and typical types of heavy refurbishment might include converting a property to residential use, including things like commercial to residential and barn conversions, creating multiple units from a single building or converting multiple units to a single building.

Loans for property refurbishment can be arranged on a flexible basis up to terms of 24 months, during which time an investor can purchase a property in need of renovation and carry out the work to increase its value before deciding whether to retain and refinance onto a longer-term solution or sell the property. It’s a great way for investors to increase their returns and is growing in popularity.

At Alternative Bridging Corporation we offer a full range of Light Refurbishment and Heavy Refurbishment bridging loans to suit a variety of property renovation and conversion projects. Why not give us a call to discuss your plans and how we might be able to help finance them.

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