Bridging Finance
Refurbishment Finance: Light and Heavy Refurbishment Explained
Refurbishment finance is bridging that funds buying a property that needs work, and sometimes the works too. Lenders split projects into light and heavy refurbishment. When the work is done, you sell or refinance at the higher value.
Written and reviewed by Davi Thakar, CeMAP qualified mortgage and protection adviser Updated
Refurbishment finance is short-term bridging used to buy a property that needs work, and sometimes to pay for the works too. Once the property is finished, you repay it by refinancing onto a mortgage at the higher value, or by selling.
Some properties cannot get a normal mortgage until they are fixed: no working kitchen or bathroom, serious damp, structural problems or a layout nobody can live in. Others can, but an investor wants to add value first. Either way, refurbishment finance is how the purchase and the works get funded.
This guide covers light and heavy refurbishment, how funding works, exits and costs. For the full picture on bridging, see our bridging loan guide.
What is refurbishment finance?
It is a bridging loan for a property that needs work. Most lenders lend a share of the purchase price at the start, often around 70%. For heavier projects, some also fund the works in stages, or lend against the value once finished. You repay when the work is done, usually by refinancing onto a buy-to-let or residential mortgage at the new value.
What is the difference between light and heavy refurbishment?
| Light refurbishment | Heavy refurbishment | |
|---|---|---|
| Typical works | New kitchen, bathroom, rewiring, plastering, decoration | Structural work, extensions, change of use, conversions |
| Planning or building regs | Usually not needed beyond normal building regulations | Often planning permission and building control |
| Funding of works | Often from your own funds | Often released in stages, sometimes with a monitoring surveyor |
| Lender choice | Wide | Narrower, closer to development finance |
GOV.UK explains when you need planning permission and building regulations approval.
Which projects do lenders see most?
These are illustrative situations, not Option Finance client outcomes.
No kitchen or bathroom
The property is unmortgageable as it stands. Fix it, then refinance.
Light refurbishment, quick turnaroundHouse into an HMO
Adding rooms and bathrooms, often with licensing. Lenders check the end use and the refinance.
Check licensing and planningExtension or loft
Structural work to add value. Usually heavy refurbishment with building control.
Works funded in stagesFlip and sell
Buy, refurbish and sell. Lenders want realistic sale prices and timings.
Allow for a slow saleHow does the funding work?
Most lenders lend a share of the purchase price at the start. For heavier projects, some also fund the works, released in stages or after each phase is completed. Some lend against the expected end value, the property’s value once finished.
Illustration only
An investor buys an unmortgageable terrace for £120,000 and spends £30,000 on a kitchen, bathroom and rewiring. A bridging lender advances 70% of the purchase price, £84,000. After four months the house is valued at £185,000. A buy-to-let mortgage at 75% gives £138,750, enough to repay the bridge and much of the investor’s own money.
What are the exit options?
- Refinance onto a buy-to-let or residential mortgage at the new value. Some lenders want six months of ownership first. See our buy-to-let mortgage guide.
- Sell the improved property.
What costs should you plan for?
- Bridging interest and fees. See our bridging loan guide.
- The works, with a contingency of at least 10%
- Stamp Duty, usually at the higher rates for additional homes. See GOV.UK’s guidance on buying an additional residential property.
- Legal, valuation and refinance costs
- Holding costs: council tax, insurance and utilities
Frequently asked questions
What is refurbishment finance?
Short-term bridging that funds buying a property that needs work, and sometimes the works themselves, repaid by refinancing or selling once finished.
What is the difference between light and heavy refurbishment?
Light refurbishment is cosmetic or non-structural. Heavy refurbishment involves structural work, extensions or change of use, often needing planning.
Can I get a mortgage on a property without a kitchen?
Usually not a standard mortgage. Bridging can fund the purchase until it is habitable, then you refinance.
How soon can I refinance after refurbishing?
Some lenders refinance on the new value straight away, others want six months of ownership. Plan the exit before you buy.
Will the lender pay for the works?
For light works, usually not, so you fund them yourself. For heavy works, some lenders release money in stages.
How long does refurbishment finance last?
Usually 6 to 18 months, depending on the size of the works and how long the refinance or sale takes.
Speak to Option Finance about your project
Tell us about the property, the works and your plan. We will tell you straight what lenders will fund, check the refinance before you buy and line up both loans.
Book a free initial consultation using the enquiry form below. See also our bridging finance advice and development finance guide.
Talk through your mortgage options
Tell us about your plans and circumstances. Your initial consultation is free.
Some buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Regulation depends on the mortgage type and circumstances.
Talk through your mortgage options
Tell us about your plans and circumstances. Your initial consultation is free.
Written and reviewed by Davi Thakar
Director & Senior Mortgage Broker
CeMAP Qualified Mortgage and Protection Adviser
Davi founded Option Finance with a vision to deliver transparent mortgage advice from a wide panel of lenders. With over 10 years in financial services, he specialises in complex cases including adverse credit, self-employed borrowers with limited trading history, and large buy-to-let portfolios. He works directly on complex cases and explains each option clearly.
Meet Davi Thakar
