Refurbishment finance

A fairly new offering in the development finance space, refurbishment finance seeks to support those clients specialising in refurbishment projects, rather than your traditional development projects.

The types of projects covered by refurbishment finance include; single dwelling refurbishments, office to residential conversions, flat conversions, barn conversions, loft/rear extensions and HMO conversions.

Refurbishment finance is somewhat of a hybrid between bridging and development finance. The lender structures the loan similar to a development finance loan in the way that they will fund 100% of the cost of works and a percentage of the purchase price. Often though they will use an in house asset manager, rather than an external monitoring surveyor, meaning that the loan can complete in a similar time frame to a bridge, c.4 weeks. On these type of projects developers often appreciate the quicker turnaround and the presence of the internal asset manager.

The loan is also priced more similar to a bridge and on smaller projects can often work out cheaper than a senior development finance loan, once all other costs are considered.

When choosing between senior development finance and refurbishment finance, it is important to look beyond just the headline rate. At Willow Isle Capital we specialise in this type of analysis and can support you in this decision making.