The Mortgage Cafe

Refurbishment Finance for Medium or Moderate Extent of Works


Accepted Property for Medium Refurbishment Solution

  • Buy to Let property
  • Multi-tenant HMOs
  • Mixed use
  • Commercial

Medium Refurbishment Extent of Works

  • 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
  • Replacement floor coverings
  • Non-load bearing structural work
  • Planning consent already in place
  • Usually not more than 30% property value

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Medium Refurbishment Solution Details at a Glance

  • 70% LTV Purchases
  • 85% LTV Improved value
  • Roll up of interest
  • Interest only available
  • Conversions to HMO
  • Refurbs up to 10 mths
  • First Legal Charge
  • No minimum income

HMO Conversions and Refurbs

The medium refurbishment can be used when converting a property to a house of multiple occupation (HMO). Internal reconfiguration can be carried out providing work is limited to being of a non-load bearing nature. Stud work partitioning of areas would be acceptable.

  • Planning permission already granted
  • Change of use approved (i.e. C3 to C4)
  • HMO License not required during refurb Planning consent and any change of use of the building should already be in place before lending is advanced.

When converting or refurbishing HMOs, this can be carried out without a HMO licence in place and obtained after the refurbishment has completed.

Medium Refurbishment

A medium 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 requiring renovation. Often improvements to the property might be installing a new kitchen or bathroom, non-structural changes to the layout, redecoration or replacement of central heating systems. Improvements to the property may only be necessary to make the property safe and fit to live in under the Decent Homes Standard or HHSRS legislation that regulates private and social housing.

Other renovations may be carried out to increase the market or rental value, or to capitalise on a uninhabitable property purchased at auction. The medium 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. In some instances, a property missing only a functional bath or WC would not be mortgageable with a conventional Buy-to-let mortgage product, a medium refurbishment product offers a viable solution to avoid mortgage retentions or using bridging finance.

Typically medium 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 require planning consent, such as changing the use of a property from single dwelling to multiple dwellings, the heavy refurbishment mortgage would be required.

Key Features of the Medium Refurbishment Solution

  • Loans from £65k
  • Loans up to £15m
  • 70% LTV Purchases
  • 6mths interest roll up
  • up to 30% cost of works

Medium Refurbishment Working Example #1

Conversion of a single dwelling to 5 room HMO:

Purchase price: £325,000 Loan amount 70% LTV: £227,500

Cost of works: £85,000 Refurb term: 6 months

End value: £550,000 Refinance amount 75% LTV: £412,500

Medium Refurbishment Working Example #2

Refurbishment of a single dwelling for Buy to let:

Purchase price: £226,500 Loan amount 70% LTV: £158,550

Cost of works: £48,000 Refurb term: 5 months

End value: £352,000 Refinance mortgage amount at 85% LTV: £299,200

The Medium Refurbishment Solution

Medium refurbishment is suitable for experienced property developers with a demonstratable track record of property refurbishment who require a facility to carry out remedial building work, renovation or for converting a property where planning consent is already granted. The refurb may include non-structural conversion of a single building into multiple letting units such as self-contained flats or a multi-tenancy home of multiple occupation (HMO) where internal configuration may be necessary. Medium refurbishment for longer term refurb projects up to 10 months

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