Renovation projects are booming in 2025 — from adding space to increasing property value to making homes greener. But the right finance is essential.

Whether you're flipping a house, upgrading your buy-to-let, or extending your family home, how you structure the funding will determine how quickly and successfully you complete the project.

Banks and lenders have become more cautious, and regulation has tightened — but the right options still exist. You just need to know where to look.

Can you use a standard mortgage for renovation?

For light works (like cosmetic upgrades), you may be able to use a traditional residential or buy-to-let mortgage. But if you're doing anything structural or tackling a property that’s not currently habitable, you’ll quickly hit roadblocks.

Standard mortgages usually won’t fund:

🚫 Properties with no kitchen or bathroom
🚫 Major structural work (extensions, loft conversions)
🚫 Title or planning issues
🚫 Commercial-to-residential conversions

In these cases, you'll need specialist funding — and that’s where renovation finance really comes into its own.

Bridging finance: The renovation power tool

Bridging loans are one of the most common ways to finance renovations in 2025. They’re fast, flexible, and work well for short-term projects.

Here’s how it works:

• You borrow a lump sum secured against the property (or properties)
• The loan term is typically 6–18 months
• You repay when you refinance or sell the property

✅ Ideal for:

• Buying properties below market value
• Auction purchases
• Major refurbishments
• Projects where speed matters

🔧 Example: A client purchases a 3-bed semi at auction for £170,000, spends £45,000 on refurb, and refinances at a new value of £280,000. The bridging loan covered the purchase and refurb, with a 12-month term and rolled-up interest.

Refurbishment bridge: Funding the works too

In 2025, more lenders offer refurbishment bridging loans, which include both the purchase price and the works budget — released in stages.

This is a great option if you need:

• Day 1 funds for purchase
• Tranche releases for works (paid via monitoring surveyor)

It gives you more control and less upfront cash exposure — perfect for investors or developers who want to stretch their capital further.

Can you remortgage to fund home improvements?

Yes — if your property has sufficient equity and you're not doing structural work, a remortgage or further advance can work well.

✅ Useful for:

• Extensions
• Kitchens and bathrooms
• Loft conversions
• Landscaping or external upgrades

The downside? It’s slower than bridging, and the lender will assess affordability based on your income, not the property’s future value.

Second charge loans: Keeping your main mortgage in place

Don’t want to disturb your current mortgage (especially if you’re locked into a low rate)? A second charge loan could be ideal.

This is a separate mortgage secured against the same property — typically at a higher rate than your first charge, but often more flexible in terms of credit and use of funds.

🏡 Perfect for:

• Homeowners looking to upgrade
• Landlords wanting to improve existing stock
• Situations where speed or flexibility is key

Second charges can often be arranged in 2–3 weeks with far less documentation than a full remortgage.

Using development finance for major projects

If your renovation is effectively a small development — such as splitting a property into flats, changing use, or adding significant square footage — you may need development finance.

Key differences:

• Lenders focus on the Gross Development Value (GDV)
• Loan-to-cost ratios vary (typically 60–75%)
• Interest is often rolled up
• Drawdowns are staged and monitored

While more complex, this type of finance gives experienced investors the scale and structure they need for bigger projects.

Things to watch out for

Financing a renovation isn’t just about securing a loan — it’s about planning for success. Here are some common pitfalls:

⛔ Underestimating build costs
⛔ Not allowing for delays
⛔ Assuming refinance valuations too early
⛔ Using personal credit cards or unsecured loans

Get the structure right at the start and you’ll save money, stress, and avoid being stuck in a half-finished project.

Work with a broker who understands renovation finance

At Willow Private Finance, we help clients structure smart, efficient renovation finance solutions — whether you're a first-time renovator or a seasoned property developer.

We can:

• Source the best bridging or second charge options
• Work with lenders who release funds quickly
• Help you plan your exit (sale, refinance, or long-term hold)
• Guide you through the drawdown process
• Make sure your cashflow supports the project

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.


We’ll help you find the smartest way forward—whatever rates do next.