BuildLoan has launched a new Light Renovation range designed to fund properties that require non-structural works but are currently considered unmortgageable.
The renovation finance specialist said the products are intended for homes that fall between traditional residential mortgages, bridging loans and heavier refurbishment finance.
Properties without a functioning kitchen or bathroom, for example, are often regarded by lenders as uninhabitable and therefore unsuitable for a standard mortgage.
BuildLoan said the new range has been designed to address this gap by offering funding for non-structural works with a streamlined application process and lower fees.
The lender said the products will support customers looking to buy, remortgage or renovate properties that require relatively light refurbishment.
The company believes light renovation remains an underserved part of the market, despite clear demand. Many existing refurbishment finance products are designed for larger structural works, meaning borrowers can struggle to secure funding for lighter improvements that nevertheless leave a property unmortgageable.
Under the new range, borrowers can access up to 85% of the property purchase price or value and up to 100% of renovation costs.
BuildLoan said the products also allow funds for renovation works to be released in stages, either in advance of each stage or once work has been completed.
The stage payments are based on a professional build cost assessment to ensure funds align with the actual cost of works rather than the property’s value.
This approach removes the risk of a down valuation affecting stage payments and delaying progress on site, the lender said.
To qualify for the range, properties must be wind and watertight and the proposed works must not require planning permission. Eligible improvements include loft conversions, kitchen and bathroom replacement, rewiring and heating installation.
The products have been developed in partnership with a number of lenders including the Stafford for Intermediaries, Chorley Building Society and Furness Building Society.
ALTERNATIVE TO BRIDGING
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.
“With over 20 years of stage payment expertise, we are a specialist in homebuilding finance solutions and we are uniquely positioned to lead innovation within the renovation finance space.
“We are particularly proud of this range of revolutionary products. This is a major development for the intermediary mortgage market, providing brokers with a range of go-to funding solutions for uninhabitable properties.”
