Light vs heavy refurbishment — what's the difference?
Lenders categorise refurbishment projects differently, which affects the loan structure available:
Light refurbishment
Cosmetic works — new kitchen, bathroom, flooring, decoration, minor electrical. No structural or planning changes. Single drawdown typical. Pricing reflects the lower risk and simpler loan structure.
Heavy refurbishment
Structural works, extensions, loft conversions, HMO conversions, commercial-to-residential. Staged drawdowns with monitoring surveyor. Higher pricing reflects the complexity and extended programme.
The distinction matters because heavy refurbishment involves more risk for the lender — works may take longer, costs may overrun, and the property may be unlettable or unmortgageable during the works. Lenders reflect this in their underwriting and loan structure.
Refurbishment finance — how costs work
Example scenario — light refurb: Property purchase price £150,000 | After-refurb value £200,000 | Loan at 75% current value = £112,500 | Interest is rolled up (no monthly payments during works) | Arrangement fee charged on completion | Exit: refinance to BTL at 75% of £200,000 = £150,000, fully repaying the bridge plus works costs. Indicative pricing is provided at enquiry stage based on your specific property, LTV, and credit profile.
How refurbishment finance is structured
For light refurbishment, funds are typically released in a single drawdown at the start. For heavy refurbishment, funds are released in stages as works are completed and verified. The initial advance covers the property purchase or refinance, with subsequent drawdowns released as the build progresses.
Refurbishment finance is almost always interest-only, with interest rolled up and repaid on exit. This preserves cash flow during the works period — you have no monthly mortgage payments while the property is being renovated.
Can I get refurbishment finance with adverse credit?
Yes. The same principles that apply to bridging loans apply to refurbishment finance — lenders focus heavily on the property, the works schedule, and the exit strategy. A credible schedule of works, realistic cost estimates, and a solid exit (refinance onto a BTL mortgage or sale of the completed property) will significantly strengthen your application regardless of your credit history.