Refurbishment bridging is a short-term loan to buy a property that needs work before a buy to let or commercial lender will lend on it, and to carry it until the work is done. In Scotland that is very often a tenement flat: a tired kitchen, an old fuse box, damp in the back bedroom, a close that has not been painted in years. Refurb finance in Glasgow, Edinburgh, Dundee and the towns around them is mostly this kind of job, and it lives or dies on the plan for the works and the exit.
It is for investment property and business purposes only, never for a home you or your family will live in.
Lenders split refurbishment into two kinds, and the split decides which lenders will look at it and what they charge.
Light refurbishment improves the property without changing its structure or its use: kitchens, bathrooms, rewiring, heating, plastering, windows, damp treatment and decoration. No building warrant is needed for most of it. Light refurbishment bridging is the most widely available kind, priced close to a standard bridge.
Heavy refurbishment touches the structure or the use: removing load-bearing walls, extensions, loft conversions, splitting a house into flats, turning a shop into a home. It usually needs a building warrant, sometimes planning permission, and lenders want to see the professional team and the costings. Where the project is effectively a rebuild or a change of use, development finance is often the better-priced facility.
On light works the day-one loan is usually a share of the lower of the purchase price and the current valuation, typically up to 70 to 75% (indicative). The value after the works matters for the exit, not for the day-one loan.
On heavier projects some lenders also look at the end value, sometimes called the gross development value, and cap the total loan, including any works money, at a share of it. That can mean more borrowing overall, but only with a valuer and a monitoring surveyor satisfied that the plan and the budget are realistic.
There are two models, and the difference matters for your cash.
Whichever model applies, plan a contingency. Old Scottish property, tenements especially, hides surprises behind the plaster.
In Scotland a building warrant from the council’s building standards service is needed for most structural work, alterations, extensions and conversions, and it is an offence to start that work before the warrant is granted. When the work is finished, a completion certificate is submitted and has to be accepted by the council’s verifier before the building is occupied.
Lenders care about both. A missing warrant on past work can stall a sale or a refinance, and the lender who refinances you at the end will expect the paperwork for anything structural you did. If you are buying a property where earlier work was done without a warrant, find out before you buy, not when the refinance valuer asks.
Much of Scotland’s rental stock is in tenements, and they bring their own checks.
For a light refurbishment, lenders mostly want a sensible budget, a contractor’s quote or schedule of works, and a clear exit. First-time investors are fundable here. For heavy refurbishment they want to see that you, or the team you have appointed, have done similar work before: previous projects, an architect or surveyor, a contractor with a track record. A first heavy project without that support is a harder case.
The lender’s valuer gives a current value and, where asked, a value after the works, based on comparable sales of finished property nearby, not on what you hope to achieve. The lender who refinances you then values the property again once the work is done. Overspending on finishes that the local market will not pay for is the commonest way to end up with more cash left in than planned.
Illustrative, not a completed 9ROK deal.
A three-bedroom tenement flat in Dundee needs a new kitchen and bathroom, a rewire and damp treatment. The price is £160,000; the works budget is £30,000; the expected value after the works is £215,000.
Run your own version on the bridge to let calculator.
Monthly interest, an arrangement fee, valuation, legal fees on both sides, sometimes an exit fee, and on staged works the monitoring surveyor’s fees. The ranges are on our bridging finance page.
Indicative only. Property given as security may be repossessed if the loan is not repaid, and most lenders ask directors for personal guarantees.
Works that improve a property without changing its structure or use, typically a new kitchen and bathroom, rewiring, heating, plastering, damp treatment, windows and decoration. Once you need a building warrant for structural work or a conversion, most lenders treat it as heavy refurbishment.
Sometimes. On light works most lenders fund the purchase and leave the works to you. On heavier projects some lenders release a works facility in stages, in arrears, after a surveyor confirms each stage is done. Either way you need cash to start.
For structural alterations, extensions and conversions, yes, and work must not start before the warrant is granted. A completion certificate is submitted when the work is finished. Lenders, and the lender who refinances you, will ask for both.
For light works, often yes, with a sensible budget, a contractor's quote and a clear exit. Heavy refurbishment usually needs some track record, or an experienced professional team around you.
Send the purchase price, the works budget and the value you expect after the work. One working day to an honest view on whether it is fundable.