A guide to heavy refurb
By Gareth Lewis Commercial director at MT Finance
As demand for UK property remains high and supply low, many borrowers are turning their attention to their existing assets and looking at how potential can be maximised. For those looking to do this, there is often the challenge of getting the necessary funding in place. When time is of the essence—as it so often is—a bridging loan could be the ideal solution here, as it can give borrowers access to funds quickly so they can seize the opportunity.
Whether your client is enlarging an existing property’s footprint to increase living space, or converting a commercial asset to residential, a heavy refurb bridging loan can be a powerful tool for homeowners, landlords and property investors looking to achieve a variety of different goals, including upping the value and maximising space.
While speed is often a key consideration for most borrowers, their reasons for renovating vary. For landlords and investors, the decision is often rooted in commerciality, especially with the current economic uncertainties requiring many to scrutinise their existing properties and portfolios. With inflation continuing to rise, it is vital that landlords not only cover their overheads but have enough margin for error. The best way of achieving this is by ensuring they are getting maximum yield out of any rental property. There are usually multiple ways an investment property can be made more profitable, from light modernisation to more substantial structural works, including extensions and reconfigurations. It is likely that any increase of the square footage will help to secure a higher rental income. A property’s use should also be considered. If a developer has unprofitable or empty commercial spaces, then it could be worth turning these into HMOs. Not only would this help provide some of the much-needed private rental units, but recent changes to permitted development rights has helped to make this process smoother. This means that some projects would not need to seek planning permission, as long as they adhere to the limitations and conditions. The removal of this potential roadblock could speed up the refurb process dramatically, including securing finance.
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