Property Refurbishment Finance in the UK — Gable Asset Finance
Gable Asset Finance — Specialist Property Refurbishment Funding
At Gable Asset Finance we provide tailored finance solutions for property owners, developers and investors throughout the UK who want to refurbish, convert or modernise buildings. Whether you are upgrading a single residential unit, refurbishing a commercial office, converting a block into apartments, or revitalising a hotel or retail premises, our specialist team can structure practical, cost-effective funding to suit your project and cash flow.
Refurbishment projects create value — but they also require capital, careful planning and specialist finance. We help you bridge the funding gap between purchase, construction and re-let or sale, while keeping your working capital available for other business needs.
What is Property Refurbishment Finance?
Property refurbishment finance covers any funding solution designed to pay for the improvement, upgrade or conversion of real estate. Unlike standard mortgages for purchase, refurbishment finance is structured around the work required — repairs, structural upgrades, reconfiguration, aesthetic improvements, compliance and modernisation. The finance can cover hard costs (contractor labour, materials, mechanical & electrical works) as well as soft costs (professional fees, planning, project management and VAT where applicable).
The key feature of refurbishment finance is flexibility: lenders assess the value-after-repair (the “ARV”) and lend against the end value rather than only the current condition. This unlocks capital for projects that increase a property’s worth.
Why Use Refurbishment Finance?
- Value creation: Invest to increase rental income, sale value or floor space efficiency.
- Preserve liquidity: Keep cash in the business for operations, acquisitions or contingencies rather than tying it up in capital expenditure.
- Seasonal & staged funding: Access finance in tranches to match project milestones and contractor draws.
- Fast access to capital: Short-term bridging finance can secure properties quickly, then be replaced with longer-term development or mortgage finance once works complete.
- Tax and accounting planning: Structuring finance correctly can support tax planning and maximise the returns on refurbishment investments (seek professional tax advice).
- Specialist support: Fund upgrades that improve energy performance, compliance and marketability.
Typical Projects We Finance
Refurbishment finance can be used across a broad range of project types and sectors. Common examples include:
- Residential refurbishments: Renovation of flats, houses, HMOs (houses in multiple occupation), conversions and loft extensions.
- Block refurbishments: Refurbishing blocks of flats, common parts, roofs and communal areas to improve value and rental income.
- Commercial office refurbishment: CAT A/B fit-outs, M&E upgrades, air-conditioning, open-plan conversions and co-working refits.
- Retail refurbishments: Shopfront refits, internal remodelling, floor replacements and technology integration.
- Hospitality & leisure: Hotel refurbishments, bar and restaurant fit-outs, spa upgrades and event-space modernisation.
- Industrial & warehousing: Racking, floor strengthening, loading improvements and mezzanine installations.
- Listed building works: Specialist conservation and sensitive restoration financed with appropriate lenders that understand heritage constraints.
- Energy efficiency projects: Insulation, glazing upgrades, heat pumps, solar PV and LED lighting to reduce operating costs and improve EPC ratings.
- Change-of-use conversions: Converting commercial premises to residential or mixed-use developments (subject to planning).
Refurbishment Finance Products — Which One Fits Your Project?
There’s no single “best” product — the right structure depends on your objectives, timeline, asset type and exit strategy. Below are the most-used finance solutions for refurbishment work:
1. Development Finance (Refurbishment Loans)
Development finance is designed for property projects where works materially increase the value. Lenders will assess the proposed end value and lend a percentage of the post-refurbishment market value (Loan-to-Value on ARV). Funds are usually released in stages (drawdowns) as works are completed, verified by valuations or surveys.
- Ideal for: conversions, multi-unit refurbishments and larger single-house projects.
- Pros: staged funding, flexible drawdowns, lender expertise with project appraisal.
- Cons: higher interest rates than standard mortgages; lenders focus on exit strategy.
2. Bridging Finance
Bridging loans are short-term, fast-access facilities used to secure property purchases or begin refurbishment immediately. They are commonly used to buy a property quickly at auction or to bridge the gap while longer-term funding or sales are arranged.
- Ideal for: time-sensitive purchases and immediate starts.
- Pros: speed, flexibility, minimal early conditions.
- Cons: typically higher fees and interest; intended as short-term solutions.
3. Refurbishment Mortgages (End-Loan / Post-Completion Mortgage)
Some lenders offer refurbishment mortgages that combine purchase finance with an agreed facility for improvements. In this model, the lender advances funds for the purchase and provides additional funds (or releases funds) on practical completion to convert to a standard mortgage.
- Ideal for: homeowners and buy-to-let investors undertaking refurbishment.
- Pros: single-lender journey and transition to a long-term mortgage.
- Cons: stricter underwriting and potential requirement for professional monitoring.
4. Commercial Property Refurbishment Loans
For offices, retail and industrial premises, specialist commercial loan products fund tenant fit-outs, landlord works and building modernisation. Terms and security differ from residential lending and can include bespoke covenant assessments.
- Ideal for: landlords, property companies and commercial occupiers.
- Pros: tailored structures for business needs; can include interest-only or capital repayment options.
- Cons: lenders will underwrite on commercial income and covenant strength.
5. Green & Energy Efficiency Financing
Increasingly popular, green finance products support projects that reduce carbon and energy use. These can include longer terms or preferential rates for heat pumps, solar, insulation and low-carbon heating — and are sometimes offered in partnership with government incentives.
6. Sale & Leaseback
If you own a property and need capital for renovation elsewhere, a sale-and-leaseback lets you sell the asset to a funder and lease it back — releasing liquidity while retaining operational use.
7. Invoice Finance & Working Capital
For refurbishment contractors or developers, invoice discounting and factoring provide working capital to pay subcontractors and suppliers during multi-stage projects.
How Lenders Value Refurbishment Projects
Lenders focus on risk: they assess the project’s viability, the borrower’s experience and the exit plan. Common valuation and underwriting considerations include:
- Value After Repair (ARV): Independent valuations estimating the property’s market value post-completion.
- Cost Plan & Contingency: Detailed budgets from contractors and reasonable contingency sums (typically 5–15%).
- Project Timeline: Realistic timetables with clear milestones and delivery dates.
- Borrower Experience: Lenders prefer applicants with prior project experience or proven professional teams (project managers, architects).
- Exit Strategy: Clear plan to refinance, sell units or rent out properties once works complete.
- Security: Property and sometimes corporate or personal guarantees depending on risk profile.
- Planning & Permissions: Evidence of planning consents where required, building control plans and conservation approvals for listed buildings.
Typical Refurbishment Finance Process
- Initial consultation: We clarify your objectives, timescales and high-level budget.
- Feasibility & structuring: Our team recommends the most appropriate finance product and lender panel based on your project.
- Documentation & quotes: You provide supplier quotes, project plans, and financial information for underwriting.
- Application & underwriting: Lenders review ARV, costs, and borrower credentials — surveys and valuations are commissioned where necessary.
- Offer & legal process: Conditional offers are issued; solicitors complete title checks and security documentation.
- Drawdown & monitoring: Funds released in stages as works progress and are certified by surveyors or quantity surveyors.
- Practical completion & exit: On completion, lenders may arrange conversion to a longer-term mortgage or allow sale/letting as per the exit strategy.
Case Studies — How Refurbishment Finance Works in Practice
Case Study A — Converting an Office to Apartments
Background: A regional property investor purchases a vacant three-storey office building with planning permission to convert into eight residential flats. The purchase price is attractive, but the refurbishment cost is significant.
Solution: Development/refurbishment finance was arranged on a 70% loan-to-value on the projected ARV. Funds were drawn in tranches tied to major milestones: structural works, windows and roof, internal services, and finishing. A detailed snagging and QA process was included to ensure quality.
Outcome: Flats were completed within the budgeted timetable, sold over the following 12 months, and the refinance process repaid the development facility with a healthy profit margin for the investor.
Case Study B — Boutique Hotel Refurbishment
Background: An owner of a small hotel required capital to modernise guest rooms, upgrade heating and improve accessibility to attract higher-paying guests.
Solution: A combination of a short-term bridging loan to begin work and a commercial refurbishment loan to fund the major works. The lender agreed staged payment releases aligned to contractor certification.
Outcome: The hotel increased room rates post-refurbishment, improved occupancy and was able to refinance onto a lower-cost commercial mortgage within 18 months.
Planning, Building Regulations & Listed Buildings
Refurbishment often intersects with planning and regulatory requirements. Lenders will expect borrowers to demonstrate:
- Planning permission where change of use or significant structural work is involved.
- Compliance with building regulations and approved building control inspections.
- Listed building consents and heritage plans for conservation-area properties.
- Environmental assessments where contamination, flood risk, or ecology matters exist.
Securing these consents early reduces delay and increases lender confidence.
Sustainability, Energy Efficiency & Green Grants
Energy costs and carbon reporting are driving refurbishment choices. Projects that improve energy performance — better insulation, double glazing, efficient boilers, heat recovery and renewables — are attractive to lenders and tenants alike. In some cases, grants, feed-in tariffs or government-backed green funding can be blended with commercial finance to reduce net project cost.
- Consider energy modelling as part of the project plan.
- Document expected operational savings to support lender underwriting.
- Seek specialist green finance where available for long-term efficiency projects.
Costs & Fees Associated with Refurbishment Finance
Refurbishment finance involves a range of costs which should be factored into your project budget:
- Interest & arrangement fees: Lender interest rates reflect risk and term; arrangement fees are common on development and bridging loans.
- Valuation & survey costs: Lenders typically request external valuations and periodic inspections during drawdown.
- Legal & conveyancing fees: Security documentation and legal checks incur solicitor costs.
- Monitoring & certification: Quantity surveyors or monitoring surveyors may charge for stage certification.
- Exit fees & penalties: Be aware of early repayment charges on short-term facilities and penalties on missed repayments.
How to Prepare a Strong Application
Preparation increases the likelihood of a smooth approval. Typical documents and information lenders request include:
- Detailed costings and supplier quotes (broken down by trade).
- Timelines and programme of works with key milestones.
- Relevant planning consents and drawings.
- Projected valuation on completion (ARV) and comparables in the local market.
- Borrower financial information: accounts, bank statements, tax returns and cash flow forecasts.
- Evidence of experience: previous projects, contractor references and project manager CVs.
- Exit strategy: intended refinance, sale or rental plan with evidence of demand (letting projections).
Common Questions (FAQs)
How long does refurbishment finance take to arrange?
Timescales vary: simple bridging loans can be arra
Gable Asset Finance are able to secure funds for businesses renovating or converting property to fund building works. We can provide finance for all stages of building works and renovation including:
- Purchase of the property
- Preliminary costs and structural overhaul
- Wind & watertight
- Plastering & services
- Second fix
Gable Asset Finance has access to all types of renovation and conversion mortgage, both advance and arrears, as well as over 10 years experience in advising on the best type of finance for renovation projects.