Can I get a bridging loan for renovations from a high street lender or a bank?

Some standard mortgage lenders might offer bridging finance, but many prefer to use brokers. The risk for them is high, and they prefer to offload that risk to brokers. Additionally, it is not easy to find information on bridging finance from these lenders.

There are numerous other lenders offering specialist deals that you might not be familiar with. For someone wading into the research independently, it might be difficult to know where to begin. It’s generally much easier to use a broker.

We completes hundreds of deals each year – we have a good feel for the market and the tools to analyse this and identify the right lender for specific situations. We liaise with the lender throughout the application and are available to negotiate or discuss complex finer points.

The legal process for bridging loans can be quite involved, and for a borrower getting into it for the first time, approaching a high street lender or a bank isn’t the best idea.

Should I get a bridging loan or remortgage to do renovations? What are the risks and benefits?

If you want to renovate the property you are currently living in, unless you plan to sell it at the end of the bridging loan, you might often be better off either remortgaging or taking a further advance (an additional bit of borrowing) with your current lender. This might be cheaper, and you could essentially be on your exit strategy from the outset.

However, if you are buying a new property, especially one that needs some TLC, it’s unlikely you would be able to get a mortgage on it initially.

To be mortgageable, a property generally needs a working bathroom and kitchen. Enquiries from auction houses often involve properties that are not mortgageable. In these cases, a bridging loan might be needed to cover the purchase and the cost of works, unless you already have savings for the works. The refurbishments could then be completed during the term of the bridging loan, and once the property is ready, it could potentially be moved onto a normal mortgage.

What type of exit strategy do I need for a bridging loan for renovations?

There are typically two main routes for an exit strategy. Firstly, selling the property once you have finished updating it. Assuming everything goes to plan, you might be able to sell it for more than you paid for it, plus the cost of works. In a best-case scenario, after paying off the bridging loan and interest, you might have some money remaining, potentially to reinvest in future projects.

Secondly, once the renovation is complete, you could choose to let the property out to tenants. Once the property is habitable, modernised and generally improved, you might be able to switch to a standard buy-to-let mortgage if it’s a standard residential property you want to rent out. The funds from that mortgage could then pay off the bridging lender.

If the plan was to live in the property yourself, obtaining a residential mortgage for yourself would be a third way of paying off the bridge.

How do I apply for a bridging loan for renovations?

Apply through an experienced broker. We can handle the whole application for you. We get to know you as a client, as well as your project and previous experience. We’ll give you a clear list of all the documentation you need – and if you struggle with gathering any of it, we’ll be able to talk you through it.

Bridging loans, especially for first-timers, might not appear straightforward, particularly if you are expecting the process to be similar to applying for a mortgage. Some questions bridging lenders ask might require someone with experience to help you answer them.

We’ve got a lot of understanding and experience in bridging finance – we know the underwriters and points of contact within different bridging companies who can help.

If things become challenging – such as a valuation coming back differently or an issue cropping up in legal work – a broker needs to be flexible and solutions-focused, so definitely use one experienced in bridging.

Anything else to add? How can a broker help?

I would just emphasise how important it is to choose a firm with experience. Ideally, they’ll have a decent-sized administration team to chase the application through to completion, and they’ll generally be someone who knows what is happening with your case whom you can speak to if you need to keep track.

Clients often tell us that good communication is what sets us apart, especially in comparison to other brokers with lower ratios of admin staff to brokers. There is always an advisor here working on your case alongside an experienced administrator so you can always reach out to someone who knows about your case.

The Financial Conduct Authority does not regulate some forms of buy to let and bridging finance. 

Think carefully before securing other debts against your home or property. 

Your home or property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it. 

There may be a fee for mortgage advice. The precise amount will be agreed with you before proceeding.

Brunel Bridging Ltd is registered in England and Wales. Registered Number 14455169. Registered Office: Elm Tree Farm Estate, The Sheepway, Portbury, Bristol, BS20 7TF.

Brunel Bridging Ltd is a full member of the National Association of Commercial Finance Brokers (NACFB) (membership number 31826) and as such, adheres to a strict industry-recognised Code of Practice.