> Funding a Renovation Project
Bringing a dilapidated property back to life can be
extremely rewarding, but arranging the finance to
purchase a property and fund the renovation work needed
can be challenging. BuildStore, self build and renovation
finance experts, explain the options.
hundreds of thousands of empty homes in the UK, there
are plenty of opportunities if you are looking to
renovate or convert a property. When it comes to arranging
finance however, you need to think about how you will
fund the initial purchase of the property, and the
renovation work that follows.
you don't want to sell your existing property until
the end of the renovation, you could consider releasing
the equity from it to fund the property purchase and
construction work, through a further advance with
your existing lender, or by re-mortgaging to a new
lender. However, not all lenders will lend for this
type of renovation project, and most will not lend
beyond 75% of your current property's total value.
lenders may consider offering a 'bridging' loan -
short-term lending, normally secured by way of a legal
charge over your current property, or the new property,
or both, ahead of the sale of the former. Whilst this
might provide the funding you need, make sure you
understand all the terms of the loan thoroughly. Especially
in the current market, these loans are not commonplace,
are usually offered with 'ad hoc' arrangements, meaning
interest rates and fees can be relatively punitive
- in some cases, more than double the costs of normal
If you have your eye on an uninhabitable property,
you may need to fund a large amount of work and the
purchase yourself. There are only a few lenders who
will offer a mortgage for the purchase and renovation
uninhabitable properties, and those that do may hold
back the mortgage funds until the property is considered
habitable, meaning you have to find funds to purchase
the property and complete the early stages of construction
option is to get a mortgage from a lender who
provides stage release mortgages for renovations,
which are secured against the new property.
The benefit of these types of mortgages is that
sufficient funds are released to purchase the
property, with further funding released at stages
throughout the renovation project (normally
up to five further stages from purchase of the
are two main methods of stage funding: 'in arrears'
and 'in advance' ('Accelerator')
With the 'arrears' method, once the initial advance
is made to purchase the property (typically up to
75% of final loan to value), funds are released in
arrears during the project - meaning you need to fund
the works for each stage before the lender releases
more funds. No funds will be releases until you have
completed the first stage of works (which includes
the structural overhaul and your initial costs and
fees). It's worth highlighting that lenders typically
calculate these stage releases based on interim valuations
of the property during the work, releasing funds typically
in four stages against increasing property value,
rather than against the actual costs you incur.
other option, if you'd prefer to get the funds up-front
is an 'advance' or 'Accelerator' mortgage (exclusively
available through BuildStore).
this mortgage, the lender typically releases up to
85% of the purchase price of the property, then 85%
of the costs, so you would be required to contribute
15% of your own funds for the deposit. The funds for
the purchase of the property and the build stages
are released, at the beginning of each stage, and
you would fund 15% of these costs from your savings.
For example, if one stage costs £16,000, the
lender would release £13,600 in advance of the
work, and you would have to fund £2,400, and
so on. With this type of mortgage, the stage releases
are actually based on your projected costs, rather
than the increasing value of the property, enabling
you to budget more accurately.
is the UK's leading expert in self build and renovation
finance and works with well-known banks and building
societies to create a range of self build mortgages
to help you find the ideal way of financing your project.
Whatever your project, you can be assured that the
expert advisors at BuildStore will discuss your requirements
in detail and will only recommend a particular product
once they have fully understood your circumstances.
They have access to a wide variety of self build and
renovation mortgages from the top lenders as well
as the exclusive Accelerator mortgage.
is the UK's leading supplier to the Self Build,
conversion and renovation market.
established originally as the Self-Build Advisory
Service in 1998 and changed our name to BuildStore
in 2000. Since then we have grown from 3 staff
to over 100 staff, established 2 offices (in
Livingston and Swindon) and have helped literally
thousands of self-builders and renovators
build their dreams!
the company started we offered a land finding
service and we brokered mortgages. From brokering
mortgages we found that self-builders weren't
offered a wide variety of mortgages, and lenders
that did offer mortgages didn't fully understand
the needs of a self- builder. Once we realized
this, we developed Accelerator, our award
winning mortgage. Since then we have never
looked back. We now employ over 100 people,
work with a huge range of industry partners
and continue to develop and design services
that we know our customers want.
have been recognised locally and nationally
with a number of prestigious awards. We are
proud of our achievements so far but rather
than feeling satisfied, we are determined to
Buildstore Financial Services Ltd 2012, Kingsthorne
Park, Nettlehill Road,
Houstoun Ind Est, Livingston EH54 5DB T: 0845
223 4888 F: 0845 223 4666
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT
REPAYMENTS ON A MORTGAGE
Buildstore Financial Services Ltd is authorised
and regulated by the
Financial Services Authority.
Whatever kind of development you're planning, whether
residential or commercial, part-built, renovation,
conversion or new build - speak to the experts.
BuildStore can finance all types of development
from a small single flat renovation through to a
large commercial project. If the property is to
be let, sold or a holiday let, we can help. Should
you require re-financing once your development is
complete; our whole of market team will take care
of that too.
Our wide range of solutions means that whether you're
an established developer, land owner or new developer,
we can find the right structure and package a deal
In an ever changing market, it's vital to talk to
the experts. Our experience and track record coupled
with our contacts and resource gives you the very
best chance of success for your project.
relationship and exclusives
We can help you find the right lender 1st time.
We have excellent relationships with some of the
most forward-thinking lenders in the industry, exclusive
products and competitive fees.
We understand that the needs of every development
and developer are different. Every deal is considered
individually so that you get a finance solution
specifically designed for your needs.
From the minute you contact us, you can be sure
of expert support and advice. By carefully assessing
your individual circumstances against our lender
panel and current loan criteria, we can minimise
the time taken between application and completion.
Funds can be available from two weeks after valuation.