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Light Refurbishment: Purchase or Refinance Property Needing Renovation

The Light Refurbishment Solution

The light refurbishment mortgage can be utilised to purchase, or remortgage, a property needing limited repairs, redecoration and refurbishment. It is suitable for most single dwelling buy to let investment property and HMOs. Light refurbishment of investment property before letting

Single AST Tenancy BTL Light Refurbishment Mortgage
Multiple tenant HMO property Light Refurbishment Mortgage

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Light Refurbishment and Renovation Details at a Glance

First Legal Charge
80% LTV on purchase
85% Improved value
No ERC
No minimum income
Roll up of interest
Interest only available
Single tenant BTL
Multi-tenant property

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Accepted Property for Light Refurbishment and Renovation

Buy to Let property
Multi-tenant HMOs
Mixed use
Commercial

About the 6-Month Remortgage Rule

The 6-month is rule observed by virtually all residential and buy to let lenders protects against artificial house price inflation as we began to see in the property boom around 2003 – 2008. In the boom, we saw property investors buying at one price on one day and remortgage days later on a drawdown facility. The refinance was based on a higher valuation with none or negligible improvements ever carried out that could justify the hike in valuation in such a short period. While the majority of lenders enforce a 6-month period, some use a 12-month period in which the property cannot be refinanced at a higher value. Light Refurbishment Products Property investors and developers who legitimately add value to a property, either by a full refurbishment schedule of works or by simply making the property mortgageable, for example, by replacing broken kitchen or bathroom fixtures, can utilise light refurbishment products and refinance within 6 months

Reasons to use a Light Refurbishment Mortgage

Purchase property in non-letting condition
No rental calculation on purchase
Mortgage from day one
Remortgage within 6 months
Capital raise at improved value within 6 months

Types of Property Accepted for a Light Refurbishment Mortgage

Residential Investment BTL
Homes in multiple occupation
Mixed use property such as flats above a retail shop
Semi commercial property
Commercial use property

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Overview of the Light Refurbishment Mortgage

The Light Refurbishment mortgage can be used for many situations where the property needs some form of work to be carried out before it can be let to a tenant. Other renovations may be carried out to increase market appeal or rental value or to capitalise on uninhabitable property purchased at auction. In some instances, a home missing only a functional bath or WC would not be mortgageable with conventional Buy-to-let mortgage lending, a light refurbishment product offers a viable solution to avoid mortgage retentions or needing bridging finance.

Typically light refurbishment would limited to non-structural work and other work that would not need planning permission or other building work that needing to be regulated under building regulations. For renovation programs that would incorporate change of use or planning consent, such as converting a single dwelling to multiple dwellings, the medium or heavy refurbishment finance products could be used.

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Typical Light Refurbishment Work

Installing new kitchen or new bathrooms
Electrical rewiring, plumbing
Re-plastering or exterior rendering
Cosmetic improvements, redecoration etc.
Installation of central heating system
Remedial work such as damp proofing or Timber treatments
New floor coverings
Works limited to non-structural changes
Work that does not involve building regulations
Does not require planning permission
Usually not more than 30% property value

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