A refurbishment bridge funds the purchase or refinance of a property and the cost of the works in a single facility — with most lenders covering up to 100% of refurbishment costs, drawn down as the work completes. It is the standard structure for investors buying at auction, repositioning rental stock or adding value ahead of a sale or refinance.
Refurbishment bridging at a glance
- Day-one advance: most lenders work to around 65–70% of the property's current value or purchase price; some will stretch to 75% or 80%, and pricing rises with the leverage.
- Works funding: up to 100% of refurbishment costs in almost all cases, released in tranches against completed work.
- Interest: charged only on funds drawn — not on the full facility from day one.
- Light and heavy refurbishment are underwritten and priced differently, so the distinction matters before you approach a lender.
- Lender coverage: we place refurbishment bridging across 135+ lenders.
How a refurbishment bridge works
The product is a close relative of the standard bridging loan, coupled with a works facility. The day-one loan either funds the purchase or replaces your existing lender if you already own the property. The works facility sits alongside it: the lender sets aside the agreed refurbishment budget and releases it in stages as the project progresses.
Funding is drawn in arrears. You pay for a tranche of work, return to the lender with invoices, and the cost is reimbursed; then you move to the next stage. If there is £50,000 of work to do, the lender reserves £50,000 for you — but if you draw £10,000 every two months, you pay interest only on what you have drawn, for the remainder of the term.
If you hold a portfolio with available equity, a cross-charge over other properties can raise the day-one advance beyond the standard level.
Light or heavy refurbishment?
Be clear which side of the line your project sits on, because the two are priced differently.
Light refurbishment is cosmetic: carpets, a new boiler, a new kitchen or bathroom, decorating — nothing structural. These products are cheaper, because the work turns around faster and a part-finished light refurb is straightforward to resell.
Heavy refurbishment is structural: altering internal walls, adding an extension, converting a loft. It is priced slightly higher because the lender carries the risk of a project abandoned part-way through — an unfinished structural job is far harder to dispose of.
Lending against the end value
The number a lender keeps returning to is the gross development value — the GDV. Buy a property for £100,000 and spend £50,000 on works, and the finished asset needs to be worth meaningfully more than £150,000; at that figure you have created no equity. If it comes out at £200,000, there is a clear margin — and a project with visible profit is easier for a lender to price competitively.
Who refurbishment bridging is for
Most residential and buy-to-let mortgage terms prohibit works to the property during the product term. Minor updates rarely attract attention, but a project of any substance — particularly one that takes the property out of the rental market, or requires you to move out — needs the right structure. A bridge lets you take the property apart and put it back together in a much better state, then exit to a sale or a term refinance.
Typical borrowers are auction buyers, landlords repositioning stock, and investors adding value before refinancing onto a buy-to-let product. With private rented lettings required to reach EPC C by 2030, refurbishment finance is also increasingly used to fund energy-efficiency works across portfolios.
What it costs
Day-one leverage drives the pricing: the more of the property's value you borrow, the more it costs. Monthly interest on refurbishment bridging has generally sat between 0.5% and 1% per month, with your credit profile, the property's condition and its location all feeding in — rates move with the market, and we quote against your actual case rather than a headline figure.
Drawdowns should be priced at the same rate as the day-one loan, and interest runs on each tranche only from the point you draw it — you pay for what you use, not for the facility limit.
On heavier projects the lender will instruct a surveyor — or, for structural work, a structural engineer — to inspect before releasing each tranche, confirming the work is being done to the required standard. These visits typically cost a couple of hundred pounds a time, and the monitoring costs are set out at the point of financing, so there are no surprises mid-project.
The process
Applying works the same way as any bridging loan; what differs is lender selection. Some lenders simply understand refurbishment better, and some will give you more leverage against the asset. Come to us with the project: what the property is worth now, what debt sits against it, the works budget and the expected end value. From there we narrow the field across 135+ lenders and place the application with the one whose criteria and pricing fit the deal. Call 020 7126 8574 to talk a project through.
Refurbishment bridging FAQs
Can I refurbish a property under my existing mortgage?
In almost all cases, residential and buy-to-let mortgage terms say you cannot carry out works during the product term. In practice lenders rarely pursue minor cosmetic updates, but for any substantial project — and certainly anything structural — a refurbishment bridge is the correct vehicle.
How much can I borrow?
Typically around 65–70% of the day-one value — the purchase price, or the figure needed to redeem your existing lender — plus up to 100% of the refurbishment costs in almost all cases. Higher day-one leverage is available at a price, and cross-charging other properties with available equity can lift it further.
Do I pay interest on the whole facility from day one?
No. Interest is charged on the day-one loan from completion, and on each works tranche only from the point you draw it. An undrawn works facility costs you nothing in interest.
How do I repay a refurbishment bridge?
Through the exit agreed at the outset: a sale of the finished property, or a refinance onto a term product at the improved value if you are retaining it.
What return should the project make?
The uplift in value should exceed the cost of the works plus the cost of the loan — otherwise you have refurbished for nothing. If you are retaining the property, look at yield as well as capital growth: a property yielding 8% or 9% will make its return, whereas in the south and south east yields run lower regardless of what you do to the asset, so the case rests more heavily on the capital uplift.
What goes wrong on refurbishment projects?
Underestimating the works. A common pattern is buying at auction, starting the refurb and finishing with a build cost well above the uplift in value. Understand the numbers before you commit, and get solid, itemised quotes from a builder you trust before approaching a lender.
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To put numbers to your own scenario, use our bridging loan calculator — it estimates interest, fees, net advance and LTV.
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