Need Cash to Renovate? Here’s How to Get a Fast Property Loan (Even as a Beginner!)
Renovating a property can be a game-changer, whether you’re flipping a house, developing a rental, or upgrading your own home. But there’s one big hurdle: funding. If you don’t have thousands of pounds sitting in your bank account, how do you finance the refurbishment? A fast property loan could be the answer!
In this guide, we’ll explain how you, as a beginner, can quickly secure a refurbishment bridging loan, the difference between light and heavy refurbishments, and key terms like LTV (Loan-to-Value), GDV (Gross Development Value), and more—all in simple, easy-to-understand terms.
What Is a Refurbishment Bridging Loan?
A refurbishment bridging loan is a short-term property loan designed to help investors, developers, and homeowners finance renovation projects quickly. These loans are often used for:
- Buying properties that need work before securing a long-term mortgage
- Flipping houses for profit
- Upgrading buy-to-let properties to increase rental income
- Purchasing auction properties that need urgent funding
The best part? Bridging loans are much faster to secure than traditional mortgages, often completing within days or weeks instead of months!
Light vs. Heavy Refurbishment: What’s the Difference?
Before applying for a loan, it’s essential to understand whether your renovation falls under light refurbishment or heavy refurbishment, as this affects loan terms, interest rates, and loan-to-value (LTV) ratios.
Light Refurbishment
A light refurbishment involves minor improvements that don’t require major structural changes. Examples include:
- Installing new kitchens or bathrooms
- Flooring and redecoration
- Plumbing or electrical updates
- Replacing windows and doors
Loan Terms for Light Refurbishments:
- LTV (Loan-to-Value) typically up to 75% of the property value plus funding for works
- Faster approval process
- Lower risk, resulting in lower interest rates
Heavy Refurbishment
A heavy refurbishment involves major renovations or structural changes. Examples include:
- Loft conversions
- Extensions or structural changes
- Full reconfiguration of internal layout
- Converting a house into flats (HMO conversions)
- Significant foundation work
Loan Terms for Heavy Refurbishments:
- LTV up to 70% of purchase price plus funding for works
- Loan based on GDV (Gross Development Value) – the estimated value after refurbishment
- Requires planning permission (in most cases)
- Higher interest rates due to increased risk
Key Terms Explained
- LTV (Loan-to-Value) – The percentage of the property value that the lender will loan you.
- GDV (Gross Development Value) – The expected value of the property once all works are completed.
How Much Can You Borrow?
Loan amounts vary based on your project and lender criteria, but here’s a rough estimate:
- Light refurbishment: Up to 75% LTV of the purchase priceplus 100% of refurbishment costs (up to a percentage of GDV)
- Heavy refurbishment: Up to 70% LTV of purchase price plus 100% of refurbishment costs (up to a percentage of GDV)
Example: If you buy a property for £200,000 and the lender offers a 70% LTV, you could borrow £140,000 towards the purchase. If the GDV is £350,000 post-renovation, the lender might fund up to 70% of GDV, meaning your total available loan could be £245,000.
How to Get a Fast Property Loan (Step-by-Step)
- Decide Your Refurbishment Type – Light or heavy? This affects loan terms.
- Find a Specialist Lender – High-street banks are slow. Look for lenders who specialise in bridging finance.
- Check Your Loan-to-Value (LTV) Eligibility – Know how much you can borrow upfront.
- Prepare Your Exit Strategy – Plan how you will repay the loan (e.g., selling the property or refinancing with a mortgage).
- Get an Agreement in Principle (AIP) – This shows lenders you’re serious and speeds up the process.
- Submit Your Application – Include all necessary documents (proof of funds, ID, property details).
- Valuation & Legal Work – The lender will assess the property and process legal requirements.
- Receive Your Funds – Once approved, money can be in your account within days.
Common Mistakes to Avoid
- Not having a clear exit strategy – Lenders need to know how you’ll repay the loan.
- Underestimating renovation costs – Always include a contingency budget of at least 10-20%.
- Choosing the wrong type of loan – Ensure you select the right financing option based on your project.
- Ignoring lender criteria – Some lenders won’t finance certain property types (e.g., non-standard construction).
- Delaying applications – The faster you submit paperwork, the quicker you get funding.
Real-World Example: Fast Bridging Loan in Action
Case Study: A property investor purchased a run-down house at auction for £150,000. The project required a £50,000 refurbishment (new kitchen, bathroom, flooring, and redecoration). The investor secured a bridging loan covering 70% of the purchase price (£105,000) and 100% of the refurbishment costs (£50,000), totaling £155,000.
After completion, the house’s GDV was £280,000, and the investor refinanced onto a standard mortgage, repaying the bridging loan and making a profit.
FAQ: Your Top Questions Answered
Q: Can I get a bridging loan with bad credit?
A: Yes, some lenders offer bridging loans for borrowers with bad credit, though interest rates may be higher.
Q: How fast can I secure a property refurbishment loan?
A: Some bridging lenders can approve and release funds within 7–14 days.
Q: What happens if I can’t repay my bridging loan?
A: You may need to refinance, extend the loan, or sell the property to repay the debt. Always have a solid exit strategy.
Final Thoughts: Is a Fast Property Loan Right for You?
If you’re an inexperienced property investor, developer, or homebuyer looking to fund a renovation quickly, a bridging loan could be the ideal solution. Understanding LTV, GDV, and the difference between light and heavy refurbishments can help you make informed financial decisions and secure funding fast.
Need expert help? Speak to a bridging loan broker today and start your property renovation journey!
For more information contact us for a fees free chat.
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📧 Email: john@sunrisecommercial.co.uk
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