Property investors use refurbishment finance to offset rising costs

Property investors use refurbishment finance to offset rising costs

0:01 AM, 4th July 2025, About 4 days ago 1

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Property investors in the UK are increasingly relying on refurbishment finance to fund renovation projects swiftly and counteract escalating expenses, one lender reveals.

Octane Capital’s analysis reveals that the cost of fully renovating a typical three-bedroom home has surged by £2,616 over the past year.

That’s up from £76,690 in 2024 to £79,306 in 2025.

This increase, driven by higher material and labour costs, has pushed investors to seek innovative funding solutions to protect their profit margins.

Unlocking capital to progress

The firm’s chief executive, Jonathan Samuels, said: “The property investment space has had to contend with considerable cost increases, from materials to labour.

“As a result, refurbishment finance has become an essential route to unlocking capital and progressing with projects in a timely manner.”

He added: “The fact that funding costs are slightly lower year-on-year is positive, and with the added benefit of speed and flexibility, it’s no surprise that more investors are choosing this method to get their properties market-ready and income-generating faster than ever.”

Loans for renovation projects

Refurbishment finance, a short-term loan tailored for renovation projects, has emerged as a popular choice.

It enables investors and landlords to accelerate refurbishments, allowing properties to be sold or rented out sooner, generating income more quickly.

Despite the rising cost of renovations, borrowing costs for these loans have fallen slightly.

Octane says that the average 12-month refurbishment loan, based on the current £79,306 renovation cost, now totals £12,612, down from £12,834 a year ago.

This reduction is attributed to a drop in the Bank of England base rate, which has lowered monthly loan rates from 0.79% in 2024 to 0.76% in 2025.

Refurbishment loans typically include fees for valuation, legal, inspection and arrangement costs, but some lenders waive exit fees, Octane says.


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Badgers tusk

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11:33 AM, 5th July 2025, About 3 days ago

12k to do £79k worth of work leaves no money to make a profit. Been there done that and profits are so tight it’s not worth doing.

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