Renovating a property that's unmortgageable? Bridging finance can fund the project.
Many renovation properties are unmortgageable in their current state. Standard mortgage lenders won't lend on properties without a working kitchen, bathroom, or that have structural issues. Bridging lenders are more flexible and will lend based on the property's future value after renovation.
This makes bridging the go-to funding option for property developers and renovators who buy run-down properties, improve them, and then either sell or refinance onto a standard mortgage.
💡 Get multiple builder quotes before applying for your bridge. Lenders want to see a detailed cost schedule, and accurate budgeting prevents costly overruns.
The lender will assess the property's current value and its Gross Development Value (GDV) — its estimated worth after renovation. They'll typically lend up to 70–75% of the GDV or 100% of the purchase price, whichever is lower.
Funds can be released in stages as renovation work progresses (phased drawdowns), or as a single lump sum at completion. Staged releases are common for heavy refurbishment projects.
Budget for 6–18 months of bridging depending on the scope of work. Monthly rates range from 0.45–1.0% with arrangement fees of 1–2%. On a £250,000 bridge for 9 months, expect total finance costs of £12,000–£25,000.
Add this to your renovation budget to ensure the project remains profitable (for investors) or affordable (for owner-occupiers).
⚠️ Always add a 15–20% contingency to your renovation budget. Unexpected costs are almost guaranteed in renovation projects, and running out of funds mid-project can be financially devastating.
Your exit is typically either a sale of the renovated property or a remortgage onto a standard mortgage once the work is complete and the property is habitable. Lenders will want to see a credible exit plan before approving the bridge.
For developers, the profit margin after all costs (purchase, renovation, bridging, sales fees) should be at least 15–20% to make the project worthwhile.
A specialist broker can match your renovation project with the right bridging lender. Get matched through Nesto for free.
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