Heavy Refurbishment Bridging Loans in Manchester: A Straight-Talking Broker’s Guide for New Developers & Property Investors
Thinking About a Property Conversion, HMO or Major Renovation in Manchester? Here’s What You Really Need to Know About Heavy Refurbishment Bridging Loans—and How to Fund Your Project with Confidence.
As an experienced bridging loan broker, I’ve seen too many first-time developers and investors in Manchester miss out on lucrative deals—not because the opportunity wasn’t solid, but because they didn’t understand how to fund it properly.
If you’re looking to convert a residential property into an HMO, dig a basement, switch a commercial unit to residential, or undertake any other significant refurbishment project, you’re likely going to need what we call a heavy refurbishment bridging loan.
Let me explain what that means in plain English—and more importantly, how to use it to your advantage.
What Is a Heavy Refurbishment Bridging Loan?
A heavy refurbishment bridging loan is short-term finance (usually 3 to 24 months) used to fund major works on an existing property. This could involve:
- Structural alterations (e.g., moving walls, adding floors)
- Basement excavations
- Change of use (e.g., commercial to residential)
- Converting a single dwelling into an HMO
- Extensions, loft conversions, airspace developments
- Projects requiring planning permission
Unlike light refurb loans—which cover paint, kitchens, carpets—heavy refurb loans cover serious work that adds value but requires professional planning and building control.
Why Manchester Is the Perfect Market for This Type of Finance
Manchester is full of potential. From under-utilised commercial spaces in Old Trafford, to tired terraces in Levenshulme and student hotspots in Rusholme, the city is a goldmine for savvy investors and developers.
But the competition is intense. Speed is everything, especially when buying below market value or at auction. That’s why bridging loans are ideal—they let you move fast and fund the entire build or conversion.
As a broker, my job is to help you structure the loan properly, maximise your leverage, and ensure your exit strategy is watertight.
Key Loan Features – At a Glance
At Sunrise Commercial, we work with specialist lenders offering:
- Loan sizes: From £250,000 to £10 million plus
- Terms: From 3 to 24 months
- Interest: Rolled up (no monthly payments)
- Loan exposure: Up to 70% of GDV
- 100% of refurbishment costs funded in arrears
- No exit fees
- First charge only (no existing first charges to be in place)
And yes—we consider the more complex deals:
- Grade II listed buildings
- Non-standard construction
- Basements and airspace developments
- Re-bridges
- Commercial-to-residential conversions
- Foreign nationals (must have a UK credit footprint)
- Limited companies, LLPs and individuals all accepted
Gross Loan vs Net Loan — What’s the Difference?
This is where many first-time borrowers get confused.
- The gross loan amount is the total facility the lender is offering. This includes the interest (which is usually rolled up) and any fees.
- The net loan amount is what you actually receive on day one.
Example:
If your gross loan is £500,000 and 12 months of interest is £50,000, your net loan will be £450,000. That’s the cash in your pocket to purchase the property or begin works. The interest is deducted up front and repaid at the end.
As your broker, I’ll walk you through this calculation and make sure you have enough working capital to complete your project.
What’s the Difference Between LTV and GDV?
Two of the most common terms in development finance are LTV (Loan-to-Value) and GDV (Gross Development Value). Here’s what they mean:
- LTV (Loan-to-Value): This is based on the current value of the property. For example, if the property is worth £400,000 today and the lender offers 70% LTV, your loan would be £280,000.
- LTGDV (Loan-to-Gross Development Value): This is based on the projected value of the property after works are completed. For example, if your completed HMO is expected to be worth £600,000 and the lender offers 70% LTGDV, your maximum exposure is £420,000.
Many bridging lenders for heavy refurb deals will use LTGDV to structure the loan, giving you more leverage to cover refurbishment costs in arrears—which helps with cashflow.
What You’ll Need to Qualify
To get approved, here’s what lenders generally want:
- Planning permission (if required) in place before loan drawdown
- Refurb budget, contractor quotes, and schedule of works
- Exit strategy (typically sale or refinance)
- Evidence of experience (if you have any—if not, we’ll guide you)
- Minimum lease of 70 years (if leasehold)
- A UK credit footprint (for foreign nationals)
Extra Incentive: Green EPC Rebates
If your refurb boosts the EPC rating, lenders may rebate part of your loan as a green bonus:
- Improve to EPC C: Rebate of 0.25%
- Improve to A or B (light refurb): 0.35% rebate
- Improve to A or B (heavy refurb): 0.50% rebate
This is paid back to you when the loan is redeemed—a nice bonus for improving energy efficiency.
Why Use a Broker Like Me?
Lenders rarely advertise the fine print. That’s where brokers add real value:
- We compare deals from multiple lenders
- Structure loans to maximise your cash flow
- Help you understand drawdown timelines
- Spot potential deal-breakers early (like missing planning or leasehold issues)
- Help package your case to get a yes the first time
More importantly, I act as your guide through the full loan lifecycle—from application to redemption—so you never feel lost.
The Bottom Line
A heavy refurbishment bridging loan can be a powerful tool for unlocking value in Manchester’s thriving property market. Whether you’re an investor looking to grow your portfolio or a developer undertaking your first project, the key to success is having the right finance structure from day one.
Need advice on how to structure your next deal? Want to discuss feasibility? I’m here to help.
Speak to an Expert Bridging Loan Broker
Let’s take the stress out of your next refurbishment project.
Visit: www.sunrisecommercial.co.uk
Or get in touch to discuss your plans and request a free feasibility check.
For more information contact us for a fees free chat.
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📞 Call us at 07939 091418
📧 Email: john@sunrisecommercial.co.uk
🌐 Visit: https://www.sunrisecommercial.co.uk/
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