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Refurbishing or retrofitting a property adds monetary value and can improve on the energy efficiency of the property, but the path to completion is often filled with cash hurdles and the threat of looming deadlines. Many investors, landlords, and developers turn to bridging finance as a way to fund these projects quickly, as going through the banks does not move fast enough.
At its best, bridging finance offers agility, and a convenient way to get your hands on funds in a matter of days. But when carrying out refurbishment or retrofit projects, it is vital you way up both the rewards and potential risks on taking on extra debt to service the works needed.
What bridging finance means for refurbishment and retrofit projects
Bridging finance is a short-term “bridge” to cover a funding gap in your finances. For refurbishment and retrofit projects, this can be used for meeting purchase costs, construction works, or both, before the property is refinanced or sold.
Goldhill Finance works closely with developers and property investors who need this convenience on-hand. They can lend money direct from us and borrow from £10,000 up to £500,000, with terms ranging from one month to two years. We provide loans on a 1st, 2nd, or even 3rd charge option, which makes it suitable for layered funding needs or when dealing with putting together investment property portfolios.
There are also no upfront fees, no exit fees, and no proof of income required, which makes the application more readily accessible for investors who may not fit the more conventional lending requirements. Lending can be decided on in as little as four hours, and everything sent through to legal or solicitors within days, which is ideal for time-sensitive projects.
Why refurbishment and retrofit is ideal for bridging finance
Property refurbishment, whether light redecoration or heavy structural work, often requires vast amount of free capital at the ready. The same applies to retrofits, such as boosting the energy performance of a property through insulation, heat pumps, or solar systems.
A few key reasons bridging loans are so useful for these projects include:
- Speed of funding: A conventional lender like your personal bank often take weeks or months to approve loans. With bridging finance, developers can act on opportunities quickly and begin work without delay.
- Flexible use of funds: Bridging loans can cover both purchase and improvement factors such as the building cost, labour, and professional fees. ·
- Short-term nature: Since most refurbishment projects are completed within months, the one-to-two-year term structure is an ideal fit for such a project’s timeline.
- Property-based lending: Decisions are primarily based on the property’s value with less importance attached to the borrower’s income, which opens opportunities to more investors.
The rewards of using bridging finance
Bridging finance can generate strong returns if it is used in a progressive manner. The most obvious reward is speed, but other advantages include:
- Value uplift: Refurbishing or retrofitting a property can dramatically increase its market value or rental yield.
- Higher resale potential: Buyers increasingly prioritise energy efficiency, so retrofitted homes receive an upturn in their prospective market price.
- Refinance opportunity: Once works are complete and the property’s value rises, many investors refinance to release equity or transition to a long-term mortgage.
- Reduced stress and red tape: With no proof of income required, managing their project can take primary focus for a developer, rather than having to waste countless hours on providing and digging out paperwork.
Experienced property investors who understand how to leverage short-term funding to achieve higher long-term gains, understand the merits of bridging finance for this exact goal.
The risks to manage carefully
Before using a bridging arrangement to fund a refurbishment or retrofit, the borrowing party must be aware and understanding of the main risks and responsibilities they need to be accountable for:
- Interest costs: Bridging loans are short-term, so monthly interest is generally much higher than standard mortgages. The cost can be easily budgeted if their project completes on schedule, but delays can increase expenses quickly.
- Exit strategy risk: A clear way of repaying be it through a property sale, refinance, or rental income in needed. Borrowers need to display confidently that they can complete the loan term on time, or before its expiry.
- Market shifts: In unstable economic periods, it is not uncommon for prices in properties to see huge shifts either up or down. A lower-than-expected valuation at the refinance stage could affect the ability to repay.
- Project overruns: Delays in planning approval, materials, or contractor scheduling can negatively disrupt the project length and overall costs.
Goldhill Finance mitigates potential pitfalls than can arise by offering transparent terms, flexible repayment structures, and realistic timeframes of one month to two years, allowing developers breathing room to complete works and arrange their next funding step.
Growing energy efficiency demand
In the UK, there is a growing demand on properties to meet modern energy standards. Landlords are now required to meet mandatory minimum EPC ratings, while homeowners and developers see retrofits as a way to future-proof their investments.
From insulation and triple glazing to air-source heat pumps and solar installations, retrofitting will often cost a lot of money to put in place properly.
You can start work immediately and avoid long waiting periods because a bridging facility will quickly release funds as you need them during each vital stage of the project. You can secure your loan with 1st, 2nd, or 3rd charges – with 3rd being advantageous if working on multiple properties or refinancing your holdings.
How to maximise success with a refurbishment or retrofit bridge loan
To make the most of bridging finance, consideration and a plan of flow is paramount to keeping things on track. Successful investors typically follow a few key steps:
- Define the project scope clearly: Identify the timeframes, cost estimates, and milestones.
- Have a strong exit route: Know how you will make repayment route from day one, whether via sale or refinance.
- Use trusted contractors and surveyors: The last thing you need is unfit work or untrustworthy people to throw everything into jeopardy.
- Budget for contingencies: Always allow a margin of error, or unforeseen costs, to be factored in.
- Work with a specialist lender: Choose an experienced bridging provider like Goldhill Finance, which understands property development and can move at the pace required.
These steps minimise risk, builds your trust and confidence with lenders, helping you secure more favourable options to take your projects on and complete them in better timing.
Why investors put trust in us
Our reputation is built on speed, transparency, and our ability to find solutions when needed most. We can help you with:
- Loan sizes up to half a million, starting from £10,000
- Borrowing periods from 1 month to 2 years
- 1st, 2nd, and 3rd charge options
- No upfront or exit fees
- No proof of income required
- Decisions within 4 hours and funds released to solicitors within days
These features remove the barrier that many investors get stuck with, and help them to focus on making their projects work for them, rather than having to counter administrative delays.
Final thoughts
If you are planning a refurbishment or retrofit and need funds fast, contact Goldhill Finance today to discuss how we can help you – you could have a decision within just a handful of hours.