Refurbishment Buy to Let Mortgage

A standard buy to let mortgage is typically used for purchasing rental properties that require little to no immediate work, whereas a refurbishment buy to let mortgage is tailored for properties needing significant upgrades or structural changes.

The latter often provides funds for both the purchase and renovation stages, enabling landlords to improve properties and potentially achieve higher rental yields.

Moreover, refurbishment loans may have more flexibility in releasing funds, reflecting the needs of renovation work.

Yes, you can use a refurbishment buy to let mortgage for conversion projects, such as turning a single-family home into a House in Multiple Occupation (HMO).

However, this may involve more complex lending criteria due to regulatory requirements and additional compliance costs.

Specialist lenders often offer tailored products for HMO refurbishment, ensuring you have the necessary financial support and guidance throughout the conversion process.

Consider exploring HMO refurbishment mortgages for tailored advice and products​.

Eligible works can range from cosmetic improvements, such as redecorating and new kitchens, to structural upgrades like loft conversions or extensions.

Projects that significantly enhance rental value or property appeal are more likely to receive lender approval.

Keep in mind that major works may require planning permission and adherence to building regulations, which your lender will want assurance about before approving staged funding releases.

Typically, refurbishment mortgages release funds in stages.

After an initial amount is provided for the purchase, subsequent amounts are released as the project progresses, often subject to inspections and completion milestones.

This ensures the project is progressing according to plan and helps mitigate risks for both you and the lender.

Depending on the scale of your refurbishment, planning permission may be required.

Structural changes, conversions into HMOs, and alterations that impact the building’s structure or use are examples where planning permission is needed.

Your lender may ask for proof of approved planning permissions and adherence to local regulations before releasing funds.

Yes, you can remortgage an existing property to raise capital for refurbishment.

This is often done to unlock equity, providing access to funds without selling the property.

Refinancing options vary, and using a buy to let remortgage can help maximise your property’s potential.

Speak to a mortgage broker to explore tailored remortgage options​.

After completing the refurbishment, landlords often refinance to secure better terms or increase borrowing capacity based on the enhanced value of the property.

This is known as a “remortgage” and can help repay existing debt or provide further investment capital.

Refinancing can optimise your portfolio’s performance, but ensure you weigh costs, such as early repayment fees, against potential benefits​​.

The deposit amount typically depends on the lender’s risk assessment and your experience.

Generally, you’ll need a larger deposit than with standard buy to let mortgages, often around 25-40% of the property’s value.

A strong renovation plan demonstrating potential rental uplift can help negotiate terms.

Timescales vary depending on factors like lender requirements, your experience, the complexity of your refurbishment plan, and planning permissions.

A straightforward case might take a few weeks, while complex projects can stretch longer due to inspections and paperwork.