Property Conversion Bridging Loan

Property Conversion Financing

Property conversion finance is specialised short-term finance enabling developers to purchase and transform a building's use or structure, commonly used for converting commercial or agricultural properties into residential dwellings. 

We arrange Property Conversion Finance for all developments, including barn conversions, hotels/offices/retail to dwellings & any commercial to residential or mixed-use development.

Our lenders are ready to lend and help you maximise these development opportunities. We can also offer Joint Venture (JV) development finance and, in some circumstances, offer 100% development finance.

Our Property Conversion Finance service

  • Market-leading property property finance from £26,000 to £250m
  • Monthly interest rates from 0.44% pm
  • LTVs up to 65% (up to 100% finance if additional collateral is available)
  • 100% build cost financed
  • No monthly payments with interest rolled-up options 
  • Terms up to 24 months

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We provide a fast, reliable service to help you get the finance you need at the best available rates.

We consider all types of credit history, including non-status, bad or adverse and don't perform automated credit checks, so there's no footprint from enquiring.

With incredible relationships with the UK's top lenders, including specialist lenders, family offices and private investors, we can source the bridging loan you require:

up to £300k loans in 3 days
up to £750k loans in 7 days 
up to £250m from 14 days

Where your timeline is critical and short, we're confident we can get your conversion finance in place. Get your best no-obligation quote today.

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Conversion Finance Uses

We arrange finance for all types of property conversions:

  • Conversion of a commercial property into a residential. 
    Converting office blocks into flats, warehouses, 
    hotels, pubs into residential property 
  • Conversion of a single residence into multiple dwellings, and vice-versa
    Such as house-to-flathouse-to-HMO or Student Let conversions
  • Conversion of industrial property and unusual buildings into residential 
    Converting water towers, churches, telephone exchanges
    into a house or flats.
  • Completion of an existing ground-up development. 
    Got your development watertight but require additional
    finance to complete or are running late.
  • Outbuilding and barn conversion
    Converting into holiday cottages/investment properties
  • Extensions & loft conversions for existing residential properties
  • Basement digs for residential properties
  • Development finance for Ground up development finance
    Development exit finance and Mezzanine finance

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Conversion Finance Lending Criteria

Loan to gross development value (LTGDV) 65% maximum (100% with additional security)
100% Build financing
Joint Venture (JV) Finance is available
Loan term 3 to 24 months
Loan amount £50,000 up to £250m
Interest options Rolled-up, retained or serviced
Interest rates From 0.44%
Decision Immediate decision in principle
Completion Up to £300k in 3 days
Up to £750k in 7 days
Up to £250m from 2 weeks
Early repayment fees None
Availability Secured on property in England, Scotland, Wales and Northern Ireland
Individuals, Companies, SPVs
No credit & adverse credit considered
Exit strategy Sale or refinance

Quick Enquiry

Use the quick enquiry below to receive your
free no obligation quote for a property conversion bridging loan.

2024 Property Conversion Finance Guide

Property conversion finance is a specialised form of funding that enables property developers and investors to convert existing properties into different types of residential or commercial spaces.

This guide will provide you with a comprehensive understanding of property conversion finance, including its uses, key features, lending criteria, advantages, disadvantages, planning permission requirements, loan-to-value ratios, loan duration, eligible users, common scenarios, eligibility criteria, timeframe for obtaining finance, information required for an application, types of properties suitable for conversion, profitable ways to use the finance, the difference between light and heavy property conversion, alternative options to bridging loans, and a concluding summary.


Key features of Bridging Loans for Property Conversion

Bridging loans for property conversion typically offer the following features:

  • Short-term financing with flexible repayment terms.
  • Quick approval and access to funds.
  • Interest-only payments during the loan term.
  • Options for rolled-up interest or retained interest.
  • Ability to borrow against the property's current value or the projected post-conversion value.
  • Options for both light and heavy property conversion financing.

Lending criteria for Property Conversion Finance

Lending criteria for property conversion finance can vary among lenders. However, common factors considered include:

  • Borrower's creditworthiness and financial stability.
  • Experience and track record in property development or investment.
  • Property valuation and feasibility of the conversion project.
  • Exit strategy for repaying the loan.

Advantage of Property Conversion Finance

  • Access to short-term funding for property conversion projects.
  • Quick approval and access to funds.
  • Flexibility in repayment options.
  • Potential for higher returns on investment compared to traditional property purchases.
  • Ability to unlock the value of existing properties through conversion.

Disadvantages of Property Conversion Finance

  • Higher interest rates compared to traditional mortgage loans.
  • Shorter loan terms, which may increase the pressure to complete the conversion project on time.
  • Risk of unforeseen challenges during the conversion process.
  • Property market fluctuations can impact the post-conversion value and profitability.
  • Potential difficulties in obtaining planning permission for certain types of conversions.

Does the property need to have planning permission?

Yes, in most cases, property conversion projects require planning permission. The specific requirements depend on the type of conversion and local regulations. It is essential to consult with the local planning authority or seek professional advice to ensure compliance with planning regulations.


Loan-to-Value (LTV) for light Property Conversion Finance and heavy Property Conversion Finance

Light Property Conversion Finance: LTV ratios typically range from 65% to 75% of the property's current value.

Heavy Property Conversion Finance: LTV ratios generally range from 50% to 65% of the projected post-conversion value.


Loan duration for Property Conversion Finance

Property conversion finance loans usually have short-term durations, typically ranging from 6 to 24 months. The duration depends on the complexity of the conversion project and the lender's terms.


Users of Property Conversion Finance

Property conversion finance is commonly utilised by:

  • Property developers seeking to convert existing properties into residential or commercial spaces.
  • Investors looking to maximise returns by converting properties into higher-value assets.
  • Individuals or companies specialising in property renovations and conversions.

Scenarios where Property Conversion Finance might be used

  • Converting residential properties into HMOs (Houses in Multiple Occupation).
  • Transforming office spaces into residential apartments
  • Converting unused industrial buildings into trendy loft apartments.
  • Repurposing commercial properties for retail, hospitality, or educational purposes.
  • Developing mixed-use properties combining residential and commercial spaces.

Eligibility for Property Conversion Finance

Eligibility for property conversion finance depends on various factors, including:

  • The borrower's creditworthiness and financial stability.
  • Demonstrated experience in property development or investment.
  • Feasibility and viability of the conversion project.
  • Adequate exit strategy for repaying the loan.

Timeframe for obtaining Property Conversion Finance

The timeframe for obtaining property conversion finance varies depending on the lender and the complexity of the project. It can take anywhere from a few days to a few weeks for approval and funds to be disbursed.


Information required for a Conversion Finance application

Typical information required for a property conversion finance application includes:

  • Details of the borrower's financial position and credit history.
  • Documentation outlining the conversion project, including plans, cost estimates, and feasibility studies.
  • Valuation reports for the existing property and the projected post-conversion value.
  • Proof of planning permission or confirmation of an ongoing application.

Types of properties that Light and Heavy Conversion Finance can be used for in the UK

Light Conversion Finance: Suitable for smaller-scale conversions, such as converting a single residential property into multiple units or changing the use of an existing property.

Heavy Conversion Finance: Applicable to larger and more complex conversions, including extensive renovations, change of use for commercial properties, or substantial structural modifications.


5 Most profitable ways to use Property Conversion Finance:

  •  Converting a large house into a house of multiple occupation (HMO).
  •  Transforming office buildings into serviced apartments or co-working spaces.
  •  Renovating disused commercial properties into trendy cafes, bars, or restaurants.
  •  Converting warehouses or industrial spaces into luxury loft apartments.
  •  Repurposing old buildings as boutique hotels or bed and breakfast establishments.

What's the difference between Light Property Conversion and Heavy Property Conversion?

Light Property Conversion: Involves relatively minor modifications or changes of use, such as dividing a single property into multiple units or converting an existing building for a different purpose.

Heavy Property Conversion: Involves substantial renovations, structural modifications, or changing the use of a property on a larger scale, such as converting an office building into a residential complex.


Is there a difference in criteria for light Property Conversion Finance Vs heavy Property Conversion Finance?

The criteria for light and heavy property conversion finance can vary slightly among lenders. Generally, heavy property conversion finance may require more extensive documentation, feasibility studies, and stricter criteria due to the larger scale and higher associated risks.


Alternative financing for Property Conversion

Development finance: Property development finance specifically designed for property development projects, providing funding throughout the construction and conversion process.

Commercial mortgages: Suitable for longer-term financing of completed conversion projects.

Joint ventures: Partnering with other investors or developers allows you to access Joint Venture Finance to share the costs and risks of property conversions.

Equity funding: Equity funding comes in the form of either standard equity finance or preferred equity finance. Whilst they have differences in priorities, both forms ultimately allow you to seek investment from individuals or companies interested in property conversions in exchange for equity or profit-sharing.


Conclusion

Property conversion finance offers a valuable opportunity for property developers and investors to unlock the potential of existing properties by converting them into higher-value assets. 


 

We're experienced financial experts who arrange short term property conversion financing for property developers, securing you the best deal from over 200 bridging loan providers including private investors and family offices.

Get expert assistance today, we're on hand to answer any questions about conversion finance.

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Call our friendly team on 01202 612934we're ready to help.

What is property conversion finance?

Property conversion finance is a type of financing that can be used to fund the redevelopment of residential or commercial property.

How does property conversion finance work?

Property conversion finance works by providing funding for the development or redevelopment of a property. The finance is used to purchase the property, as well as to cover the costs of construction or renovation, with some lenders financing 100% of the build.

What can property conversion financing be used for?

Property conversion financing can be used for a variety of property types, including residential, commercial, and industrial. The following are examples of what property conversion finance can help with:

  • The conversion of commercial premises into residential property—for example, converting a small office building into flats, a warehouse or a public house into a residential property. 
  • Converting a single house into multiple flats and vice versa 
  • Completion of an existing ground-up development—that is, you have reached late Phase II/early Phase III, but need funds to finish. 
  • Outbuilding and barn conversions- existing outbuildings converted into holiday homes or investment properties.
  • Extensions or loft conversions to existing residential properties—creating additional rooms and increasing usable floor space. 
  • Basement conversions.

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