Refurbishment bridging: fund the works, exit on the value

A property that isn't yet lettable, saleable or mortgageable; works that will make it so; and an exit priced on the improved value. Refurbishment bridging is the finance built for exactly that shape of deal — provided the numbers are done honestly at the start.

The shape of the deal

You buy (or already own) a property that mainstream lenders won't touch as it stands — no kitchen, no tenancy, tired commercial space, a conversion part-done. A refurbishment bridge funds the purchase and some or all of the works for the months they take. The exit is the whole point: once the property is finished, it either refinances onto a term mortgage against its new, higher value, or sells. The bridge is judged — and should be judged by you — entirely on how credible that finishing line is.

Light or heavy — and why the label matters

• Light refurbishment — cosmetic and internal works: kitchens, bathrooms, rewiring, redecoration, works not needing planning or structural change. Priced closer to standard bridging, higher advances, quicker process.
• Heavy refurbishment — structural work, extensions, use-class changes, works needing planning or building regulations sign-off. Fewer lenders, more monitoring, priced accordingly.

The boundary matters because presenting a heavy project as light wastes weeks with the wrong lenders — and because presenting a light project into heavy-refurb pricing costs you money for no reason. Classifying the project correctly on day one is basic preparation, and it is where we start.

How the money is structured

Lenders advance against the purchase (day one) and typically fund works in arrears against certified progress — staged drawdowns — rather than handing over the works budget up front. Interest usually rolls up or is retained, so nothing is serviced monthly while the property produces no income (the mechanics, explained). The numbers a credit committee reads first: total cost of purchase plus works plus finance against the realistic end value — with contingency in the works budget, because a refurbishment without contingency is a forecast, not a plan.

Where these deals go wrong — and how not to

Three failure patterns account for most refurbishment bridges that end badly. An optimistic end value — the exit refinance appraises lower than hoped and the numbers no longer close; we sanity-check the end value against evidence before you commit, not after. An under-costed works budget — the bridge runs out of term while the works run over; contingency and honest scheduling fix this at the planning stage. And the wrong product entirely — if your project is really ground-up or a substantial conversion, it is development finance, not a refurb bridge, and forcing it into the wrong wrapper costs you at every stage. We will tell you which it is, even when the answer is the more complicated one.

What to bring

The property and price; a works schedule with costs (builder's quote beats estimate); the planning position if relevant; the end value you believe, with whatever supports it; and your intended exit — refinance or sale. From that we pre-underwrite: classify the project, stress the numbers, and place it with the lenders whose appetite actually matches it. If it doesn't stack, you'll hear that first — with what would need to change.