Refurbishment finance, light and heavy.
Property refurbishment loans from £100k to £25m for schemes a mainstream lender will not touch. The single question that decides your product, your pricing and your timeline is whether the works are structural. Here is where that line sits and what falls on each side of it.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed July 2026.
What is refurbishment finance?
Refurbishment finance is short term lending secured against a property you are improving, designed to be repaid once the works are complete and the property is either sold or refinanced at its improved value.
It exists because mainstream mortgage lenders will not lend on property that is not habitable. No kitchen, no bathroom, structural defects, missing building regulations sign off: all of these make a property unmortgageable in conventional terms and all of them are routine for a refurbishment lender. What a refurbishment lender underwrites is not the property's current condition but the plan to change it and the exit that follows.
The line between light and heavy
Almost everything about your facility follows from which side of this line your scheme sits on, and borrowers routinely misclassify their own project.
| Light refurbishment | Heavy refurbishment | |
|---|---|---|
| Works | Cosmetic and non structural: kitchens, bathrooms, rewiring, replastering, windows, decoration | Structural alteration, extensions, change of use, anything needing planning or building regulations |
| Product | Bridging loan | Closer to development finance |
| Drawdown | Usually a single advance | Staged, in arrears, against works completed |
| Monitoring | None, or minimal | Monitoring surveyor at each stage |
| Cost | Standard bridging pricing | Plus monitoring costs at each visit |
| Speed | Faster, fewer moving parts | Slower, more due diligence on works and contractor |
Definitions vary between lenders and some use a third middle category. The consistent test is whether the works are structural or require consent.
Why the classification matters commercially. Running a light scheme through a heavy structure means paying monitoring costs and accepting drawdown mechanics you do not need. Running a heavy scheme through a light structure is worse: you reach the point where the lender will not release funds for structural work it never underwrote, mid build, with a contractor on site.
If your scheme sits near the line, tell us the actual schedule of works rather than a description. Whether a wall is load bearing decides more about your finance than the size of your budget does.
What refurbishment finance costs
| Cost line | Typical range | Notes |
|---|---|---|
| Monthly interest rate | from 0.69% pm | Driven by LTV, works type and exit strength |
| Lender arrangement fee | around 2% of gross loan | Usually added to the loan |
| Valuation | £500 to £3,000+ | Usually includes a projected end value assessment |
| Legal costs | £1,500 to £5,000+ | You cover both sides' solicitors |
| Monitoring surveyor | £1,000 to £2,500 per visit | Heavy schemes only, per drawdown stage |
| Exit / admin fee | £0 to 1% | Lender specific; we flag it up front |
Indicative ranges based on current whole of market pricing, July 2026. Commercial and second charge security prices higher.
The cost people forget is time. Interest runs for the whole period the works take, not the period you planned for them to take. A three month overrun on a £500,000 facility at 0.75% per month is over £11,000 of interest that was not in the appraisal, plus the risk of needing an extension. Build contingency into the term rather than into optimism about the programme.
For the full breakdown of every bridging fee and how each is driven, see what a bridging loan actually costs.
How lenders assess a refurbishment
The schedule of works. A costed, itemised schedule, not a paragraph. This is the document the valuer works from when producing a projected end value, and a vague schedule produces a conservative valuation, which reduces your loan.
The end value, assessed by their valuer not you. Lenders instruct a valuation giving both current value and projected value on completion of the specified works. Valuers are typically conservative on the projected figure. Building an appraisal on an optimistic end value is the most common reason a refurbishment deal that looked comfortable fails at underwriting.
The contractor. On heavier schemes, who is doing the work matters. A named contractor with relevant completed projects and a fixed price contract materially strengthens a case. Intending to project manage it yourself is not fatal, but it needs to be disclosed and evidenced rather than discovered.
Your working capital. Because heavy refurbishment drawdowns are released in arrears, you fund each stage before you are reimbursed. Lenders will ask how you are bridging that gap, and running out of working capital mid programme is a common failure mode that has nothing to do with the quality of the scheme.
The exit. Sale or refinance. If it is refinance, the critical question is whether the take out lender will lend at the value you are assuming, at the leverage you are assuming, at the time you are assuming.
The six month rule, and why it catches people out
This is the single most common timing problem on a refurbishment exit and it is entirely avoidable if you plan for it.
Many term and buy to let lenders apply a six month rule: they will not lend against the improved value until you have owned the property for six months, and until then they lend against your purchase price instead. On a scheme where you bought at £200,000, spent £50,000, and created a £320,000 asset, that distinction is the difference between a refinance that repays your bridge and one that does not.
The practical consequences:
- Do not set a bridge term shorter than your realistic refinance date. Finishing the works in month three does not mean exiting in month three.
- Not every lender applies it. Some will lend against open market value earlier where the uplift is clearly evidenced by the works. That is one of the specific things worth testing across the whole market rather than assuming.
- The clock start point matters. On a newly created title the relevant date may differ from your acquisition date, which is worth establishing early rather than at redemption.
If you intend to hold the asset rather than sell it, the wider sequence is covered in extend, bridge or refinance.
Refurbishment means valuation at both ends
A refurbishment facility is underwritten against two figures: the current value of the asset as it stands, and the market value on the special assumption that the works are complete to the specified scheme. Your leverage is usually capped against both at once, so a generous view of the finished value does not help if the day one figure is thin.
Two practical consequences. A property mid works is not a desktop or automated valuation case — the thing being valued is changing, so expect a physical inspection. And where drawdowns are staged against certified progress, each re inspection carries a lead time that belongs in your cash flow rather than in a surprise. The full valuations guide →
Realistic timeline on a refurbishment bridge
Two to four weeks is the honest range, and it is slower than a straight purchase bridge for one structural reason: the lender needs both a current value and a market value on the special assumption that the works are complete, which means a physical inspection. Automated and desktop routes do not apply to a property that is mid works or about to be.
Where drawdowns are staged against certified progress, each re-inspection carries its own lead time. Build those into the cash flow at the outset rather than discovering them mid project. Check whether your deadline is realistic →
Refurbishment finance FAQs
What is the difference between light and heavy refurbishment finance?
The dividing line lenders use is structural work and planning. Light refurbishment means cosmetic and non structural works: kitchens, bathrooms, rewiring, replastering, decoration, new windows. Heavy refurbishment means structural alteration, extensions, change of use, or anything requiring planning permission or building regulations sign off. Light refurbishment is funded as a bridging loan. Heavy refurbishment sits closer to development finance, with staged drawdowns and a monitoring surveyor, and is priced and structured accordingly.
How much can I borrow for a refurbishment?
On a light refurbishment bridge, typically up to 75% of the current value on first charge residential, with the works funded from your own cash or from a separate works facility. On heavier schemes lenders will often advance a percentage of purchase price plus a percentage of the works cost in arrears, capped against the end value once complete. The cap that binds is usually the gross development value once the works are done, not the day one value.
Do lenders fund the refurbishment works themselves?
On heavier schemes, yes, usually in arrears through staged drawdowns released once a monitoring surveyor has signed off each stage. That means you fund each stage first and are reimbursed, so working capital matters. On light refurbishment the works are more often funded by the borrower, with the bridge covering the acquisition.
What does it cost?
Light refurbishment prices as standard bridging: from 0.69% per month plus around 2% arrangement, valuation and legals both sides. Heavy schemes add monitoring surveyor costs at each stage. Overruns add interest, which is the cost most often left out of appraisals.
Can I refinance onto a buy to let mortgage after refurbishment?
Usually yes, and this is the most common exit. The point to plan for is that many term lenders apply a six month rule, meaning they will not lend against the improved value until you have owned the property for six months. Where a refurbishment completes quickly, that can leave a gap between finishing the works and being able to refinance at the new value, and the bridge term needs to accommodate it.
Will a lender lend on a property with no kitchen or bathroom?
A bridging lender will. A mainstream mortgage lender generally will not, because the property is not habitable and therefore not conventionally mortgageable. That gap is precisely what refurbishment bridging exists to fill: the lender underwrites the asset and the plan to make it mortgageable, rather than its current condition.
How is the end value assessed?
By a valuer instructed by the lender, who will usually provide both a current value and a projected value on completion of the specified works, based on a costed schedule of works you provide. The projected figure is not your estimate, and valuers are typically conservative on it. Building your appraisal on an optimistic end value is the most common way a refurbishment deal fails at underwriting.
What does refurbishment finance cost?
A light refurbishment bridge is priced as standard bridging, from around 0.69% per month plus an arrangement fee of around 2%, valuation and legal costs on both sides. Heavier schemes carry the additional cost of monitoring surveyor visits at each drawdown stage. The other cost people forget is time: interest runs for the whole period the works take, so a build programme that slips is a cost as well as an inconvenience.
How long does refurbishment finance take to arrange?
Typically two to four weeks. It runs slower than a straight purchase bridge because the lender needs a current valuation and a market value as if the works were complete, which requires a physical inspection rather than an automated or desktop report. Where the facility releases funds in stages against certified progress, each re-inspection adds its own lead time to the programme.