Short-Term Financing Options for Renovation Completion

robtob21

Hello,

I’ve owned my property for a year now. It’s a listed building, purchased very much as a doer-upper. Securing planning permission took some time (and money!), but I now have that in place.

The property was purchased for £485,000, funded by a £385,000 mortgage and the remainder in cash. The lender’s original valuation was £590,000, based on an earlier agreed sale price (which I successfully negotiated down), and they did not commission a new valuation.

I’ve started Phase 1 of renovations, which include new external drainage, rewiring, new ceilings, window restoration, and guttering, totaling around £100,000. £50,000 of that was expected to be gifted to me, but unfortunately, that has since been delayed or possibly fallen through. As such I am short!

I explored a second charge mortgage to fund the remaining phase 1 works and future works (including replumbing, new kitchen and bathroom), looking to borrow £75k–£100k. My mortgage lender’s app estimated the property value still at £590,000, and they initially agreed in principle to lend £75,000 based on that. However, at the final stage they wanted a formal valuation byt a surveyor. As the house is mid-renovation I declined saying i had decided to continue to fund the works from cash for now.

Cash is now running low. I need approximately £50,000 to complete Phase 1, which should be done in a couple of months time. At that point, the house will be in a presentable enough state for a formal valuation, enabling me to proceed with the second charge to hopefully cover both repayment of this initial £50,000 gap and the remaining renovation works.

I do have the option of a £50,000 personal loan from my bank, with a minimum 1-year term, though realistically I’d need to keep it for 5+ years for affordability calculations to work. Obviously this would delay me in any application for the secondary charge.  

My question is: is there a smarter or more flexible short-term financing option available - such as bridging finance - that could help me bridge this 2-3 month gap until I can access the second charge?

Many thanks,
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