It has been set up for properties requiring non-structural renovation works but that are not in the condition to be mortgaged, such as a property with a non-functioning kitchen or bathroom and considered uninhabitable.
The renovation finance specialist explained that the new range has been designed to close the gap between residential mortgages, bridging and heavy renovation finance.
The application process will be streamlined and include a reduced fee structure to help enable people to get the funding they need.
BuildLoan has stated that light renovation is an under-served segment of the market, despite there being clear demand for it. This is because most existing renovation products are designed for work on what are deemed to be inhabitable houses, as it is harder to source funding for lighter works that still render a property uninhabitable.
The products that are within the range allow the customer to borrow 85% of the property purchase price and up to 100% of renovation costs, and unlike any other company, funds towards the renovation work can be paid in stages during the work, or once each stage is completed. Before the work, BuildLoan ensures stage releases are aligned with actual costs rather than the value of the property, so there is no risk of down-valuation affecting the stage payment and delaying the work.
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For an application to be considered, the property must be windtight and watertight and not require planning permission for any of the proposed work.
Chris Martin, head of product development and lender relationships at BuildLoan, added: “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.”
BuildLoan recently partnered with Furness Building Society to bring out larger-loan self-build products.
