BuildLoan has launched a new Light Renovation range aimed at brokers seeking an alternative to bridging finance for properties that require non-structural refurbishment but are currently unmortgageable.
The renovation finance specialist said the new products are designed to fund properties that fall between traditional residential mortgages and heavier refurbishment finance.
Homes without a functioning kitchen or bathroom are often considered uninhabitable by mainstream lenders and therefore unsuitable for standard mortgages. In many cases, brokers turn to bridging to facilitate a purchase and refurbishment.
BuildLoan said its new Light Renovation range has been developed to offer a “more cost-effective alternative” for these scenarios, providing funding for non-structural works alongside a streamlined application process and reduced fees.
The lender said light renovation remains an underserved part of the market despite clear demand. Many refurbishment finance products are structured around larger structural works, leaving borrowers with limited options when properties require lighter improvements that nevertheless render them unmortgageable, BuildLoan claimed.
Under the new range, borrowers can access up to 85% of the property purchase price or value and up to 100% of renovation costs.
STAGED PAYMENTS
Funds for renovation works can be released in stages, either in advance of each stage of work or once each stage has been completed. BuildLoan said stage payments are aligned with the actual cost of works through its professional build cost assessment, rather than the value of the property.
This removes the risk of a down valuation affecting the stage payment and delaying works, the lender said.
To qualify, properties must be wind and watertight and the proposed works must not require planning permission. Eligible works include loft conversions, kitchen and bathroom replacement, rewiring and heating installation.
The range has been developed in partnership with several lenders including the Stafford for Intermediaries, Chorley Building Society and Furness Building Society.
Chris Martin, head of product development and lender relationships at BuildLoan, says: “Typically, if a client’s property is uninhabitable and they can’t secure a standard residential mortgage, brokers default to bridging.
“But bridging loans can be costly with high fees and interest rates and short repayment terms. Thanks to this new Light Renovation range, we can provide a safer, more affordable alternative to plug this gap in the market and help clients opt for redevelopment projects that can be both financially lucrative and environmentally friendly.
“And because of the streamlined application process and reduced fees, the range makes it easy for clients to buy, remortgage and renovate ‘doer-upper’ properties.
“With over 20 years of stage payment expertise, we are a specialist in homebuilding finance solutions and we are uniquely positioned to lead innovation within the renovation finance space.
“We are particularly proud of this range of revolutionary products. This is a major development for the intermediary mortgage market, providing brokers with a range of go-to funding solutions for uninhabitable properties.”
