This was of course to be expected considering in 2021 one of the key areas which experienced sustained growth was the demand for bridging loans which facilitate light to heavy refurbishment works.
Typically, refurbishment loans are used for two purposes: 1. those who are looking to undertake light refurbishments (e.g. a new kitchen, bathroom and general decoration works) 2. those who are looking at heavy refurbishment projects (e.g. structural works).
Refurbishment loans can be used by a range of borrowers and can be tailored to provide a specific solution according to what they want to achieve.
Often investors and developers opt for a refurbishment bridging loan because of how quickly funds can be made available in order to start the required works. Additionally, bridging loans are often used in the case where the investor or developer needs to refurbish the property to enable them to move onto a longer-term mortgage arrangement.
For example, if the property is derelict and deemed unfit for human habitation, it may not initially be eligible for certain types of mortgages. Bridging finance, therefore, provides the borrower with a solution to complete the necessary works and get the premises into a condition where they can either sell the property, let it out or obtain a longer-term finance arrangement.
With many investors and developers looking for opportunities to make a larger return on their investment, renovating a property can achieve this by adding significant value to a dwelling. This is especially true at a time when well-maintained properties, designed to fit the work from home trend, are being snapped up, sometimes within hours of coming to the market. While there is currently a great level of uncertainty in the economy, it is clear homebuyers and renters alike are looking for properties that are designed for modern living.
As a result, the bridging community undoubtedly has a responsibility to support borrowers throughout their property journey as they build and develop their portfolios. This will be key throughout the rest of 2022, where refurbishment projects will play a vital role in keeping the property market moving forward.
At Hope Capital, we recognise this and as a result, have recently revamped our residential, mixed-use and commercial refurbishment offering, so rates now start from just 0.59% per month. The need to provide tailored, competitive solutions will continue to be a priority during the upcoming months, which is why our refurbishment products enable borrowers to access funding extremely quickly. In turn, it provides the ideal solution for a range of investors and developers looking to obtain funding to undertake improvements works to a property — both on a light and heavy refurbishment basis.
Ultimately, no matter what else 2022 has in store, the role of lenders and brokers alike will be instrumental in ensuring opportunities are created for investors and developers looking to undertake refurbishment projects.
