Bridging finance for refurbishments

The fast track to funding your refurb

The pace of the UK property market rewards readiness. If you are buying a tired flat to modernise, converting a house into an HMO, or upgrading a rental to meet stricter EPC requirements, timing often decides margin. Traditional mortgages can be slow and inflexible for works. Bridging finance is designed for speed, letting you secure a property, start works, and exit into a sale or longer-term mortgage once value is created.

Recent market data underscores why bridging is now mainstream for refurbishments. Forecasts show the total UK bridging loan book could reach £12.2bn by the end of 2025, up from £10.3bn at the end of 2024, with record completions and faster turnaround. Applications surged to over £18bn in Q1 2025, a 55% quarterly rise, reflecting the need for quick capital amid housing shortages and competitive purchase windows. Completion times average roughly 38 to 43 days from offer to completion, far quicker than standard mortgages, allowing projects to start on site without costly delays.

Investors are using bridging to act decisively. Purchases now account for around 37.5% of bridging usage as refinancing recedes, and investment purchases have risen to nearly a quarter of loans. Heavy refurbishments account for a meaningful share, supported by lenders that can go up to 75% loan-to-value and offer rates starting around 0.64% to 0.75% per month. Many deals then exit by sale after works, or by refinancing onto a buy-to-let product once the EPC is improved and rental income is proven.

Understanding APR is not just about percentages - it is about clarity on total cost versus uplift in value.

A well-structured bridge can unlock projects that would otherwise stall. The key is planning your exit upfront and building a realistic programme, budget and timeline.

Is this right for you?

Bridging suits time-sensitive purchases, auction buys, refurbishments and conversions that increase value quickly. If your project needs a fast start, has a clear scope of works, and you can evidence an exit strategy by sale or refinance, bridging can be a fit. Landlords upgrading EPC ratings, investors executing light or heavy refurbs, and buyers managing a chain break often prefer the speed. Homeowners needing short-term capital for a complex move may also consider regulated bridging. If you have thin equity, a stretched timeline, or uncertain planning risk, you will need a cautious approach and contingency.

Ways to fund your refurbishment

1. Standard bridging loan - purchase and works funded, interest rolled up.

2. Refurbishment bridge - drawdowns linked to works stages for cost control.

3. Light refurb bridge - cosmetic or non-structural works, usually faster.

4. Heavy refurb bridge - structural changes, higher budgets and oversight.

5. Green upgrade bridge - EPC-focused improvements to reach compliance.

6. Bridge-to-let - move onto a buy-to-let mortgage post-works.

7. Auction bridge - rapid completion to meet auction deadlines.

Costs, impact, returns and risks

Who can qualify and what lenders expect

Eligibility focuses on the asset, the borrower profile, and the exit. Lenders assess property condition, location, and the gross development value after works. They will look at your experience, though first-time investors can still be considered with a strong team and clear plan. Expect to provide purchase details, a schedule of works, contractor credentials, planning status if structural changes are involved, and evidence of the exit route. For a sale exit, comparables and agent appraisals help. For a refinance exit, projected rent, EPC improvements, and potential buy-to-let criteria are key.

Affordability testing varies. Many bridges roll up interest to the end of the term, which eases monthly cash flow but requires enough headroom in value to cover interest and fees. Loan sizes typically range from hundreds of thousands to several million, with LTVs around 50% to 75% subject to asset strength. Kandoo works with a panel of UK lenders to match your project to the right structure, whether you need a light refurb facility or a heavy refurb product with stage releases.

From offer to completion - the steps

1. Share project details and preferred exit strategy.

2. Receive initial terms indicative on rate and LTV.

3. Instruct valuation and legal due diligence promptly.

4. Finalise schedule of works and contractor plans.

5. Lender issues formal offer for sign-off.

6. Complete and draw funds to acquire the property.

7. Begin works, request stage releases if applicable.

8. Exit via sale or refinance before term ends.

Speed is valuable, but certainty of exit is essential.

Weighing it up

Read this before you commit

Before signing, align the loan term with a realistic works programme plus buffer. Obtain fixed-price quotes where possible and validate contractor capacity. Model best case and conservative scenarios for sale price and refinance metrics, including EPC improvements and rental stress tests. Check whether the lender permits structural works and how stage releases are administered. Review legal title thoroughly for restrictions that could slow the project. Confirm all fees, including any minimum interest periods and exit fees. If the market is cooling locally, consider a longer term or a plan B exit. Keep an eye on local comparables and ensure your finish level matches buyer or tenant expectations.

Alternative routes if bridging is not right

1. Refurbishment mortgage or development finance for larger projects.

2. Secured second charge against existing equity.

3. Joint venture equity partnering with profit share.

4. Personal or business loan for small, cosmetic upgrades.

5. Remortgage with further advance if timelines allow.

Frequently asked questions

Q: How fast can a bridging loan complete? A: Many complete in roughly 4 to 6 weeks from offer, with some cases faster when legal and valuation are streamlined and documentation is ready early.

Q: What works qualify as light versus heavy refurbishment? A: Light covers cosmetic or non-structural improvements. Heavy includes structural changes, significant M&E, or reconfiguration. Lenders tailor products and oversight accordingly.

Q: What loan-to-value can I expect? A: Typical LTVs range from about 50% to 75%, depending on property type, borrower profile, and the strength of the exit strategy.

Q: How do I exit the bridge? A: Most borrowers sell after works or refinance onto a buy-to-let mortgage once the EPC, rent, and valuation support the long-term product.

Q: Are interest payments monthly? A: Many borrowers roll up interest, paying it when the loan redeems. This supports cash flow during works but requires sufficient equity at exit.

Q: Can first-time investors use bridging? A: Yes, if supported by an experienced team, detailed schedule of works, and a credible exit plan. Lenders value preparation and contingencies.

How Kandoo can help

Kandoo is a UK-based retail finance broker with access to a wide panel of bridging lenders. We help you compare rates, LTVs and structures for light or heavy refurbs, EPC upgrades, and auction purchases. Our team streamlines valuation, legal and stage release steps so you can focus on delivery and exit with confidence.

Important information

This guide is for information only and is not financial or mortgage advice. Bridging loans are secured against property and may involve risks, including repossession if you do not keep up repayments. Seek professional advice tailored to your circumstances.

Next step: speak with a specialist broker to assess your project, timeline and exit options.