Refurbishment Finance

In property investment, value isn't just found; it's created. The most successful investors are adept at identifying properties with untapped potential and transforming them into modern, high-value, and high-yielding assets. Refurbishment Finance is the essential financial tool that empowers this strategy, providing the necessary capital to both acquire and renovate a property.

At Knightly Group, we specialise in funding the entire refurbishment journey. We understand that every project is unique, from a light cosmetic update to a major structural overhaul. We act as your expert funding partner, structuring flexible and fast finance that covers the purchase, the cost of the works, and the professional fees, ensuring your project runs smoothly from acquisition to profitable exit.

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Tailored Funding for Every Project Scale

We recognise the clear distinction between different levels of refurbishment and work with lenders who specialise in each category, ensuring the funding is perfectly matched to the scale of your ambition.

• Light Refurbishment Finance For projects where no structural changes or planning permission are required. This typically includes cosmetic improvements designed to modernise a property and increase its rental appeal or resale value. Common scenarios include new kitchens and bathrooms, redecoration, new flooring, landscaping, and upgrading a property's Energy Performance Certificate (EPC) rating. Funding is typically arranged via a specialist bridging loan.

• Heavy Refurbishment & Conversion Finance For more substantial projects that involve structural alterations or a change of use. This category requires a more detailed approach, often overlapping with development finance. We are experts in arranging funding for projects such as rear or side extensions, loft conversions, converting a single dwelling into a House in Multiple Occupation (HMO), or changing the use of a commercial building to residential units.
   

Specialist Feature: Below Market Value (BMV) & 100% Funding

A key advantage of our specialist lender access is our ability to arrange Below Market Value (BMV) Property Finance. For investors who have skilfully negotiated to buy a property for less than its open market value—a common scenario for tired or dated properties requiring refurbishment—this product is transformative.

• The Valuation Principle: The foundation of this product is that lending is secured against the property's certified Open Market Value (OMV), rather than the negotiated purchase price. This principle allows the discount you negotiate to be instantly recognised as equity, with the loan calculated against the asset's full intrinsic worth.

• Achieve 100% Loan to Cost: This structure can, in the right circumstances, allow you to borrow 100% of the purchase price, completely funding the acquisition.

• Incorporate Additional Costs: If the total loan does not exceed the lender's maximum LTV (e.g., 70-75%) of the higher market value, the facility can be structured to include all your construction and refurbishment costs. The interest for the loan term can also be "retained" or rolled-up within the loan, meaning no monthly payments are due.
   

Key Financial Features & Criteria

Our refurbishment facilities are designed for maximum flexibility, allowing you to focus on your project.

• Funding Structure: Finance is typically structured to provide funds for both the initial purchase and the renovation. We can secure facilities that lend against the purchase price, with 100% of the pre-agreed refurbishment costs then being made available in stages (drawdowns) as the work progresses.

• Loan to Value (LTV): Lenders will typically fund up to 75% of the purchase price, and for heavy refurbishments, up to 70% of the Gross Development Value (GDV), which is the property's anticipated end value once works are complete.

• Loan Term: Facilities are short-term, usually from 1 to 24 months, providing a sufficient window to complete the works and execute your exit strategy.

• Interest Options: To aid cash flow during the project, interest can be "retained" or "rolled-up" within the loan facility, meaning no monthly payments are required.

• The Exit Strategy: All refurbishment loans are predicated on a clear exit plan. Our role is to ensure the initial funding seamlessly connects to this exit, which is typically either the sale of the property or a refinance onto a long-term Buy-to-Let or commercial mortgage once the value has been maximised.
   

Whether you are a seasoned developer or an investor embarking on your next project, we have the expertise to structure the optimal funding solution. Contact Knightly Group today to discuss your refurbishment plans.