Using a bridging loan to renovate a derelict and uninhabitable property

A property that is classed as derelict is unfit for human habitation and, in most cases, will not qualify for a mortgage. There are many factors that can make a property unmortgageable, with the most common reasons being wet or dry rot, structural problems and Japanese knotweed.

Moreover, if the property is not derelict but has no kitchen and bathroom, it is likely to be unmortgageable. Therefore, many people look to carry out renovation works to improve the property to be eligible for a mortgage.

Even if you believe a house is habitable and apply for a mortgage, a valuer may decide that essential work is needed. When this happens, it can result in mortgage retention where the lender releases only a portion of the mortgage loan, with the rest available after work has been completed.


How a bridging loan can be the solution

If you don’t have significant private funds at your disposal and you’ve found a property that offers scope for you to renovate, you could be looking for a substantial amount of cash. This is where a bridging loan or light refurbishment loan can help. A bridging loan is a type of loan that is designed to get projects moving.

They can provide the cash needed to fund building work and bring a property up to scratch. These loans are usually arranged and released quickly to allow property developers to get the ball rolling and eliminate delays. On some occasions, Bridging Loans can even fund 100% of the property price, meaning a deposit is not always needed.


Using a Bridging Loan broker

If you are considering purchasing a uninhabitable property, or have inherited an uninhabitable property, one of our expert bridging finance brokers can help you find the best bridging loan deal. Contact us today and one of our advisers will be in touch.