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Refurbishment Costs
Definition
The expenses associated with renovating a property, including materials, labor, and professional fees.
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A refurbishment HMO mortgage covers both the purchase and renovation costs of a property before it can be used as an HMO.
Was this helpful?Covered works typically include structural repairs, room conversions, and HMO-specific safety upgrades.
Was this helpful?Funds are usually released in stages as renovation milestones are reached and approved by the lender's surveyor.
Was this helpful?Refurbishment HMO mortgage rates typically range from 5.5% to 8.5%, higher than standard HMO mortgages due to increased risk during the renovation period.
Was this helpful?Most lenders require a minimum 25-30% deposit for refurbishment HMO mortgages, though some may accept 20% for experienced landlords with strong renovation plans.
Was this helpful?Your lender will arrange a surveyor to assess the property and renovation works. You may also want an independent survey for peace of mind.
Was this helpful?Criteria include renovation experience, strong financial position, detailed renovation plans, realistic cost estimates, and compliance with building regulations.
Was this helpful?Refurbishment HMO mortgage applications typically take 6-10 weeks due to additional complexity, renovation plan reviews, and potentially multiple property inspections.
Was this helpful?You'll need proof of income, bank statements, property details, detailed renovation plans, cost estimates, builder quotes, and potentially planning permission.
Was this helpful?Some lenders may include planning permission costs in the refurbishment loan, but this varies by lender. You may need to cover these costs separately.
Was this helpful?Evaluate HMO conversion opportunities by assessing: local planning policy and Article 4 direction status, potential room yield and optimal layout configuration, structural suitability and conversion costs (typically £8,000-15,000 per room), local rental demand and comparable rental rates, licensing requirements and associated costs, parking availability and neighbor considerations, and total project costs versus potential returns. Calculate yields based on post-conversion values and include all setup costs. Consider factors like ceiling heights, natural light, sound insulation requirements, and compliance with space standards. Professional feasibility studies can identify potential issues before purchase.
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