A Broker’s Guide to Refurb GDV Loans

In the dynamic landscape of the bridging market within the UK, property investors are constantly seeking innovative financing solutions to maximise their returns.

One product rapidly gaining traction, and for good reason, is the Refurb GDV. 

This specialised funding option is proving invaluable for clients who not only want to acquire their next investment property but also need to cover the often-significant costs associated with refurbishment works.

At LendInvest, we’re seeing a higher demand for this type of finance, reflecting a growing trend among savvy investors to unlock immediate value through property improvements.

If you (or your client) are considering a project that involves both acquisition and renovation, understanding Refurb GDV loans is paramount for success.

What Exactly is a Refurb GDV Loan?

A Refurb GDV loan is a form of bridging finance designed to provide capital for both the purchase of a property and the subsequent refurbishment work. Unlike traditional bridging loans that might only cover the purchase, Refurb GDV loans factor in the refurb costs and Gross Development Value (GDV) – the estimated value of the property after the planned refurbishment is complete. This allows for a more comprehensive funding package, empowering investors to undertake more ambitious projects without having to source separate funding for the renovation.

The Numbers: What You Can Expect

When it comes to Refurb GDV loans, understanding the key financial parameters is essential for planning the project effectively. Here’s a breakdown of what LendInvest can typically offer:

• Competitive Funding: We can provide funding up to £5 million. This includes the flexibility to cover 100% of your refurbishment costs, helping you and your clients achieve their investment goals without compromise.
• In-house Specialists: We have two in-house MRICS surveyors (one building surveyor and one registered valuer) to monitor all deals and provide advice on both the construction side and how to maximise value.
• Max Day 1 LTV: You can expect a maximum Loan-to-Value (LTV) on Day 1 of 75%. This is based on the initial purchase price of the property.
• Max LTGDV (including interest & fees): The maximum Loan-to-Gross-Development-Value (LTGDV) is 70%. This crucial metric ensures the loan amount remains proportionate to the property’s value after the refurbishment, encompassing all interest and fees.
• Max LTC: For those focused on keeping their “Loan-to-Cost” (LTC) ratio in check, we offer a generous maximum of 90%. This means a significant portion of your total project costs (purchase + refurb) can be covered by the loan.
• Loan Term: The maximum loan term is 18 months, providing ample time to complete your refurbishment project and arrange your exit strategy.
• Loan Size: We cater to a range of project sizes, with a minimum loan size of £500,000 and a maximum of £5 million.

Understanding the Drawdowns

The release of funds for your refurbishment works is structured to align with your project’s progress:

• Max 3 Drawdowns: Funds are typically released in a maximum of three drawdowns, with payments made in arrears as work progresses.
• Min Drawdown of £25k: Each drawdown must be a minimum of £25,000.
• In-House Expertise: We leverage both in-house Quantity Surveyors (QS) and a panel of external professionals. For convenience, some drawdowns can even be conducted remotely.

The Properties We Support

Refurb GDV loans are versatile and can be applied to a variety of residential properties suitable for refurbishment.

• Extensions: Projects involving extensions are considered, with a maximum increase of 40% of the Gross Internal Area (GIA).
• Property Types: We finance a range of property types, including Houses in Multiple Occupation (HMOs), flats, and houses.
• Residential Focus: Upon completion of the refurbishment, the property must be 100% residential.
• Conversions: We support conversion from commercial or semi-commercial use to residential use.
• Buy-to-Let: These loans are particularly well-suited for properties intended to be Buy-to-Let (BTL) investments.

Seamless Transition to LendInvest BTL Loans

One of the significant advantages of choosing LendInvest for your Refurb GDV loan is the integrated support for your exit strategy. When your refurbishment project is complete and it’s time to transition, our dedicated Buy-to-Let (BTL) team is available to assist. They can seamlessly support you in moving onto one of our competitive term loans, ensuring a smooth and efficient refinancing process. This continuity provides peace of mind and simplifies your long-term property investment strategy.

Get Started Today

Refurb GDV loans represent a powerful tool for property investors looking to maximise the potential of their acquisitions through strategic refurbishment. With competitive funding, flexible drawdown options, and seamless exit strategies, they are becoming an indispensable part of the UK property market.

If you’re ready to explore how a Refurb GDV loan can help you achieve your property development ambitions, contact us today, or start your quote with our new Refurb GDV Calculator.