Refurbishment loans for UK property investors
Property renovation funding made simple. Whether you're updating a buy‑to‑let, converting a commercial premise, or undertaking heavy works — refurbishment loans via our 80+ lender panel help you bridge the gap between purchase and renovation.
Last updated: November 2025, edited by Joe Morley, reviewed by Vivek Seda
What is a refurbishment loan and how does it work
What is a refurbishment loan?
A refurbishment loan is a short‑term, secured loan designed to fund renovation, conversion, or refurbishment work on residential or commercial property. It supports both light cosmetic updates and heavy structural work — whether you’re a landlord, investor or developer.
Refurbishment finance differs from a standard mortgage: it considers the future value of the property post‑works, not just its current condition.
How refurbishment loans work
Phased funding (drawdowns): Lenders often release funds in stages — an initial “purchase or refinance” tranche, then further drawdowns as renovation milestones are met.
Short‑term duration: Typical loan terms range from 6 to 24 months. Some may roll up interest or offer interest‑only repayment.
Exit strategy required: Repayment is usually triggered by sale or refinance of the property (e.g. via a mortgage or sale).
What you can use refurbishment loans for
Cosmetic upgrades
kitchens, bathrooms, redecoration, rewiring, re‑plumbing
Structural changes
Loft conversions, extensions, basement conversions, change-of-use, permitted‑development works
Buy‑refurbish‑sell (BRS/BRT) or buy‑refurbish‑let (BRL)
Strategy for residential or commercial properties
Pros and cons
Benefits of choosing refurbishment finance
Access properties others won’t touch: Properties needing renovation or uninhabitable properties can still be financed.
Speed and flexibility: Faster approval and fund release compared with traditional mortgages, especially for renovation-heavy projects.
Maximise value potential: Borrow based on projected value post‑renovation (Gross Development Value, GDV), allowing more flexibility than standard mortgage LTVs.
Suitable for different project scopes: Whether cosmetic refresh or full conversion — good flexibility depending on project size and scope.
Things to watch out for
Higher cost vs. traditional mortgage: Interest rates may be higher; fees (arrangement, exit) and risk on refurbishing projects can increase total cost.
Strict eligibility & documentation: Lenders expect a solid exit strategy, realistic cost estimates, planning (if needed), and accurate valuations.
Risk if project fails or market changes: If refurbishment or exit plan fails (e.g. sale or refinance), repayment obligation remains.
Short repayment horizon: Loans are often 6–24 months; ensure you have clear plans for exit via sale or mortgage.
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Find out more about refurbishment loans
What’s the difference between a refurbishment loan and a standard mortgage?
A standard mortgage funds fully habitable properties. A refurbishment loan finances properties needing work — often releasing funds in stages and repaid post‑renovation.
Can I get a loan for heavy structural work or conversion?
Yes. Many refurbishment loans cover structural alterations, loft/basement conversions or change‑of‑use — provided you submit a solid project and exit plan.
How long until I get funds?
With refurbishment‑friendly lenders, funds are often released within days of approval — significantly faster than traditional mortgages.
Do I need planning permission?
If your property conversion or structural changes require planning permission or building regulation, you must have approval before applying.
What happens if the value doesn’t increase as projected?
You’re still liable for loan repayment. A robust cost and exit plan helps mitigate the risk, but property value fluctuations pose a risk.
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Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
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Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
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Vivek Seda
Business Finance Manager
Vivek is the Asset Based Lending Manager at Funding Options by Tide. Vivek has been in the industry for over 10 years, working for both lenders and brokers. His product specialisms cover Asset Finance, Invoice Finance, Property Finance and structured transactions.