The UK housing market is undeniably under pressure – demand is outstripping supply at every turn. Propertymark’s recent Housing Insight Report paints a clear picture: the average estate agent has only 48 properties available, while 71 eager buyers are lined up.
And it’s not just buyers feeling the crunch – rentals are just as competitive, with about 10 tenants vying for each property. This imbalance is pushing both house prices and rents ever higher.
While the government has set ambitious goals to deliver 1.5 million new homes during this parliament, there’s still a lot of uncertainty. If we are to truly meet the needs of homeowners and tenants, we must get more out of the housing stock we already have – not just build new homes.
Property investors understand the potential of picking up properties that need some attention – even relatively simple changes can significantly enhance a property’s appeal. But what if we took it a step further? We’re seeing more investors taking on substantial refurbishment projects, aiming for bigger transformations and even greater returns.
THE POWER OF REFURBISHMENT
Investors have long recognised the value in snapping up properties needing a facelift. Even modest improvements can make a home much more attractive.
Recently, though, there’s been a noticeable shift towards larger, more ambitious projects – investors are transforming properties with extensive refurbishments like extensions, loft conversions, and more.
Why the shift? Because the potential pay-off is significant. By transforming properties to appeal to a wider pool of tenants, landlords can achieve better yields. And that’s more important now than ever – rising costs and Stamp Duty changes mean higher yields are crucial. The opportunities here are exciting, and investors are embracing them wholeheartedly.
UNLOCKING POTENTIAL WITH FLEXIBLE FUNDING
There are great opportunities to adapt existing housing stock to better serve buyers and tenants, delivering strong returns for investors savvy enough to spot them. However, funding for these projects isn’t always accessible. Conversations with brokers make it clear – there is a strong need for lenders who bring the flexibility and willingness to get deals done that HTB is known for.
The response to our Heavy Refurb range has shown just how much demand there is for this kind of lending. With funding available from day one and up to 70% of the current property value, investors have the support they need to move forward confidently.
PLANNING THE EXIT STRATEGY
Funding is only part of the picture – planning an exit strategy is just as critical. Refurbishment finance is short-term by nature, so a clear route out is crucial from the start. Many investors look to sell after refurbishing, aiming to flip properties for profit. However, selling is not always predictable and depends heavily on market conditions.
An alternative approach is refinancing to hold the property as a rental asset. This requires a lender skilled in managing these transitions, which is where HTB excels. We have extensive experience in helping clients move seamlessly between development finance, bridging, and buy-to-let products – creating bespoke packages that cater to individual needs.
Having that continuity makes all the difference, avoiding the delays and confusion that can come from moving between lenders.
PARTNERING FOR SUCCESS
Heavy Refurbishment is just one example of how HTB continues to adapt to meet broker and client needs. We’ve introduced dual representation on bridging cases to streamline the legal process, making it faster and easier for brokers. We’ve also added business development executives to give brokers more responsive support.
Close collaboration between brokers and lenders is key if we’re going to tackle the housing crisis. Investors want to breathe new life into tired properties, but they need flexible funding to make it happen. As an industry, we need to work together – only then can we truly support these investors and help meet the urgent housing demand.
