BuildLoan is launching a new light renovation range, designed for properties requiring only non-structural renovation works but not currently in a mortgageable condition.
Properties without a functioning kitchen or bathroom, for example, would be regarded by many lenders as uninhabitable and therefore unmortgageable.
The new range has been designed to close the gap between residential mortgages, bridging and heavy renovation finance. It aims to offer broader suitability for non-structural works with a streamlined application process and reduced fee structure, enabling people to get funding to buy, remortgage and renovate a property.
BuildLoan says light renovation is an "underserved segment of the market – despite clear demand".
The products allow customers to borrow up to 85% of the property purchase price or value and up to 100% of the renovation costs. Funds towards renovation work can be paid in stages, either in advance of each stage of work or once each stage has been completed. BuildLoan’s professional build cost assessment ensures stage releases are aligned with actual costs, rather than the value of the property. This means there is no risk of down-valuation affecting the stage payment and delaying the work.
To be applicable, a property must be wind and watertight and planning permission should not be required for any of the proposed works. Loft conversion, kitchen and bathroom replacement, rewiring, and heating installation are all covered.
The range has been developed in association with several partner lenders – including the Stafford for Intermediaries, Chorley and Furness building societies.
Chris Martin, head of product development and lender relationships at BuildLoan, said: “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.
“This is a major development for the intermediary mortgage market, providing brokers with a range of go-to funding solutions for uninhabitable properties.”
