The Intermediary – March 2026 - Flipbook - Page 62
BRIDGING
Opinion
Long-term
solutions for light
renovation homes
C
ost of living pressures
continue to affect
mortgage affordability
– a situation which
appears likely to
worsen. To a young
family with growing children, the
perfect long-term family home seems
increasingly out of reach.
This is encouraging more families
to consider buying a ‘doer-upper’.
These sorts of properties include
those where kitchens and bathrooms
need modernising, where windows
and doors need replacing, or that
need rewiring or heating upgrades.
They might require plastering or
damp remedies or repairs to the roof.
Buyers might even be considering
completing part-finished works le by
previous owners to achieve habitable
standard while geing over that
affordability hurdle.
Historically, there has been no
long-term mortgage solution for
these borrowers. The default option
has been a short-term bridging loan
with high interest rates and fees
alongside the pressure to complete the
renovation and arrange a replacement
longer term mortgage within
12 months.
The bridging approach presents
a Consumer Duty risk for brokers.
Namely, how to deliver great outcomes
in terms of price and value, and avoid
the potential foreseeable harm in
terms of the stress and extra costs
of not meeting a short deadline to
complete the renovation work.
A light renovation mortgage can
provide the perfect solution to this
challenge. A long-term residential
mortgage to cover the cost of
buying and renovating a property
that’s uninhabitable or in need of
modernisation, with a residential rate
and fee structure and no pressure to
complete the work quickly. Fantastic
outcomes for families trying to create
a home at a slower pace while working
around family life.
Designed as a standard owneroccupier mortgage with a term of up
to 40 years, these products offer the
benefits of a residential mortgage
over the long-term while providing
funding to complete the property
upgrade at the start.
This is precisely why BuildLoan
has just launched a range of light
renovation products, which deliver
up to 85% of the property purchase
price or value and up to 100% of the
renovation costs. The unique cashflow
approach means that funds to cover
the cost of the renovation works are
released based on the value of the
completed home rather than the
current value.
Families increasingly want to do work without the time pressure
60
The Intermediary | March 2026
CHRIS MARTIN
is head of product
development and lender
relationships at BuildLoan
The stage release paern is agreed
as part of the mortgage application
and is guaranteed as each stage of
work is reached – there are no formal
valuations or loan-to-value (LTV)
limits while the work is carried out.
Even beer, funds can be provided
in advance of work starting, and
during the renovation period monthly
payments can be restricted to interestonly to keep costs down, then changed
to repayment once the work had
been completed. This means that
completing a light renovation project
with minimal personal cash is a
realistic option.
As housing supply remains
constrained and affordability
pressures persist, more buyers are
likely to look at properties that require
some degree of improvement. For
brokers, this trend creates both a
challenge and an opportunity.
Traditional solutions like bridging
finance will continue to have a role
to play, but they are not best fit for
families undertaking relatively
modest works and who need to avoid
time pressure and minimise costs,
and who need a long-term residential
mortgage to own their home.
For brokers looking for great
outcomes for their clients over
the life of their mortgage, a light
renovation mortgage can provide the
perfect balance.
It can deliver long-term funding,
excellent value and the money at
the right time to buy and renovate
their new home, while avoiding the
potentially foreseeable risks and high
costs of short-term funding. ●
