If you are a first-time or experienced property developer with a property to renovate, you may be looking for a development loan to fund your project.
What is a property renovation?
A renovation involves altering and improving an existing structure including redesigning, remodeling and refurbishing.
Renovations can vary dramatically in scale from minor building works to full renovations of derelict buildings like barns.
The renovated property can be kept as a home by the owner or sold on completion – often for a healthy profit.
What are your funding options for your property renovation project?
If you are renovating your own property and intend to continue living there, a home renovation loan from a high street bank or a remortgage might be the best option for you. These options would normally offer a longer loan repayment period which is better suited if you won’t be selling the property at the end of the project.
Property development loan or bridging loans
Property development finance or bridging loans are most popular for property renovations, refurbishments, and developments that will be sold upon completion. These are shorter-term development loans which will provide the immediate funds needed for the project, in return for full repayment (plus interest) upon the sale of the property.
Equity Financing
Equity financing is also an option for shorter-term renovations. This is where the lender essentially buys an equity, or share, of your property. They front the money required in exchange for a return when the property is sold. The lender will be taking their share of the profit rather than interest, so they would need to have very good faith in the renovation project plans before investing.
It is important to note that if the renovated building is intended for owner occupation, then it will be FCA regulated. If the finished property is to be sold after completion, then the project is not FCA regulated.
Hunter Finance are experts in the property market in the South East of England and can advise you on the profitability of your renovation plans, along with financing options.
Property Renovation Case Studies
Hunter Finance have provided development finance for a number of property renovation projects in the South East of England. Take a look at some of the case studies to see if we might be the right lender for you.
Barn conversion in Lewes, East Sussex
This barn conversion of 2 existing barns into 4 units homes was £1.5million renovation project with a GDV of £2.6million. Hunter Finance provided a short term 12-month development loan to help with land costs and also staged payments to help with build costs.
5-bedroom house renovation in Groombridge, East Sussex
This renovation of a 5-bed detached home required a property development loan of £500,000 with a GDV of £2 million. The loan was repayable upon the sale of the property which ended up coming in under budget at only £445,000.
View Groomsbridge Renovation Property
Conversion of bungalow to 2-story home in Ware, Hertfordshire
This project involved the renovation and conversion of a bungalow into a 2-story home in Hertfordshire. They required development finance of £250,000 for a 12-month project with GDV of £750,000.
