Light Refurbishment Finance in 2026: Cosmetic Works at 0.75 Percent a Month

The electrician wants £7,500 on Friday. The first fix is done, the maisonette in Leicester is stripped back to bare plaster, and the invoice is sitting in the landlord’s inbox with seven days on it. The facility that is funding the project says 100 percent of works funded, which the landlord read six weeks ago as money arriving when the bill does. It does not work that way. The lender pays after the stage is finished and evidenced, not before it starts, which means the £7,500 comes out of the landlord’s own account first and comes back roughly a week later. Nobody hid this. It is written into every offer letter as two words that borrowers skim past: in arrears. Understanding what those two words do to your bank balance is the difference between a project that runs smoothly and one that stalls between trades.

Refurbishment Loan, a trading name of Lenzie Consulting Ltd (company number 08174104), is a UK finance arranger and introducer, not a lender. Bridging and refurbishment finance secured on investment property is unregulated lending that falls outside the Financial Conduct Authority’s regulated mortgage perimeter, and the business holds no FCA authorisation because the products it arranges are unregulated. It does not arrange regulated bridging, residential mortgages, or any loan secured on a property the borrower or an immediate family member lives in or intends to live in; those enquiries are referred to a regulated firm. Every figure below is an indicative range, confirmed only in a formal offer, never on a website.

In the episode below, Georgina walks through the arrears mechanism and what it means for the cash you need behind a cosmetic project.

What counts as light, and the three tests lenders apply

Light is a risk category, not a description of how much paint you buy. Three tests decide it. Does the structure move. Does the use of the building change. Does the work need planning permission or building regulations sign off. Three noes and you are light, and a wide field of lenders will compete for the case.

Inside that category sit new kitchens and bathrooms, full rewires, a new boiler and heating system, replacement windows and doors, damp treatment, flooring, plastering and complete redecoration. The building stays the same shape, keeps the same use, and remains structurally sound throughout, so the lender’s security never deteriorates while the money is out. That is the whole reason light refurbishment finance prices from 0.75 percent a month while structural work starts at 0.85 percent.

Two grey areas catch people. Removing an internal wall is often still light if it is not load bearing, but the moment a structural engineer’s calculation or a steel beam appears, the project has crossed over and belongs with heavy refurbishment finance. Separately, many lenders reclassify any project where the works cost more than roughly half the current value of the property, however cosmetic each individual line looks, because at that point the facility is mostly funding construction rather than an asset.

In arrears is a cash flow instruction, not a footnote

In arrears means you are the project’s first lender. The facility is the second, and it always pays you back after the work exists.

The sequence is fixed. You agree a priced schedule at the outset. The purchase advance completes the buy. The works facility is committed but undrawn, so no interest accrues on it yet. You then fund a stage from your own working capital, evidence it with photographs or a short inspection, and the lender reimburses that tranche, normally inside a week. Repeat to completion.

The practical consequence is that your cash requirement is not the whole schedule of works. It is the largest single stage, plus a buffer for the days between finishing a stage and the reimbursement landing. A £24,000 schedule broken into four stages of roughly £6,000 each needs around £6,000 of working capital in rotation, not £24,000. A £24,000 schedule where one trade wants £15,000 up front needs £15,000. How you break the programme into stages is therefore a financing decision as much as a building one, and it is worth agreeing with your contractor before you sign anything.

Two habits keep this comfortable. Stage the works so no single tranche is larger than the cash you can carry twice over, because you may be mid stage on one trade while waiting for reimbursement on the last. And get the evidence requirements in writing at offer stage: some lenders accept dated photographs and invoices on cosmetic work, others want a short inspection, and the difference is several days per stage across a six stage programme.

Worked example: a Leicester maisonette, stage by stage

A landlord’s limited company buys a two bedroom maisonette at £138,000. It is sound but dated: no usable kitchen, a failing bathroom, original wiring. The schedule is £24,000 and the valuer reports £195,000 on completion. Nothing structural, no planning, so it is light, and the facility runs nine months against a five month programme to leave room.

Line	Figure
Purchase price	£138,000
Day one advance at 75% LTV	£103,500
Works facility, in arrears	£24,000
Total facility	£127,500
Rate, retained, 9 month term	0.79% per month
Interest on the day one advance	£7,359
Interest on drawn works money	£774
Arrangement fee at 1.5%	£1,913
Value on completion	£195,000
Exit refinance at 70%	£136,500

The deposit is £34,500, being 25 percent of the price. The cost of the money across nine months is £10,046. Now the part the table above hides, which is the month by month cash position on the works.

Stage	Cost	Paid by	Reimbursed
Strip out and rewire	£7,500	Borrower, week 3	Week 4
Plumbing and bathroom	£5,200	Borrower, week 7	Week 8
Kitchen and joinery	£6,800	Borrower, week 12	Week 13
Decoration, flooring, finish	£4,500	Borrower, week 17	Week 18

Peak working capital on the works is £7,500, the largest single stage, and in practice you want closer to £12,000 available so a delayed reimbursement never stops the next trade starting. Add that to the deposit and fees and the honest cash requirement for this project is around £50,000, not the £34,500 the deposit line suggests. The refinance at £136,500 clears the £127,500 facility and returns most of the deposit, which is what makes the cycle repeatable.

A genuinely light project should never pay heavy pricing

A surprising number of cosmetic schemes get quoted at structural rates, and the cause is almost always the paperwork rather than the building. A schedule of works that says “refurbishment throughout, £24,000” gives an underwriter nothing to check, so the underwriter prices for the possibility that something structural is hiding in the total. A schedule that separates trades, itemises room by room, includes preliminaries such as skips and scaffolding, and carries a contingency of ten percent reads as a project someone has actually thought about.

The same applies to the wording. Describing a job as “opening up the ground floor” invites a question about steels that a description of “replacing internal stud partition” does not. Across our lender panel, the gap between the light floor at 0.75 percent a month and the heavy floor at 0.85 percent is worth £1,530 on a £127,500 facility over twelve months, and presenting the works accurately is usually all it takes to stay on the right side of it.

Terms, fees and the 3 to 18 month window

Light facilities run 3 to 18 months and sit between £75,000 and £5 million. Interest is normally retained from the advance, so nothing is paid monthly while the property earns nothing. The lender arrangement fee is 1.5 to 2 percent, deducted at completion. The valuation reports two figures, today and on completion, so it costs more than a plain mortgage valuation. Both sets of legal costs fall to you. Some lenders add an exit fee as a percentage of the loan or the redemption figure, which is the line most often missing when two quotes are compared.

Pick the term with the overrun in mind. A five month programme on a six month facility leaves no room for a delayed kitchen delivery, and an extension costs more than the three spare months you declined to buy. A refurbishment bridging loan written nine months long against a five month schedule is not wasted money, it is the cheapest insurance in the deal.

2026 outlook

With the Bank of England base rate held at 3.75 percent since July 2026, pricing on cosmetic work has been stable through the year, and the light end of the market remains the most competitive part of bridging because the security stays mortgageable throughout. UK search demand for light refurbishment finance runs at about 30 a month, with the broader refurbishment loan term at 260, which tells you most borrowers arrive at the category before they know what it is called. The live pressure in 2026 is trade cost rather than money cost: contractor quotes written six months ago are coming in short, and lenders are turning down schedules that carry no contingency line at all. Build the ten percent in at the start and the facility is sized for the project you will actually deliver.

FAQ

Does 100 percent of works funded mean I need no cash for the building work? No. It means the total works cost is eventually reimbursed in full, not that the money arrives before the bills do. You fund each stage first, evidence it, and the lender reimburses within days. Plan for the largest single stage in available cash, with a buffer on top so a slow reimbursement never halts the programme.

Can a first time investor get light refurbishment finance? Yes. Cosmetic work is the most accessible category in bridging, and a first project is financeable, particularly where a competent named contractor has priced the schedule. Expect pricing toward the upper end of the 0.75 to 0.99 percent band until you have a completed scheme behind you.

How much deposit do I need on the purchase? Typically 25 percent of the purchase price, since the day one advance goes to 75 percent LTV, plus the arrangement fee, valuation and legal costs on both sides. On a £138,000 purchase that is roughly £40,000 before any works cash, which is why the honest budget is always higher than the deposit figure alone.

What if part of my schedule turns out to be structural? Tell us before you apply rather than after. A project pushed through a light facility that turns out to need a steel or a planning application risks a funding gap mid build, which is the most expensive problem in refurbishment. Reclassifying at the start costs a slightly higher rate. Reclassifying at month four costs a re-bridge.

Talk to us

Send the property, a priced schedule broken down by trade and your intended exit, and we will come back with indicative terms from the panel. Start with light refurbishment finance, or compare it against heavy refurbishment finance if any part of your schedule touches structure or planning.

See also: property refurbishment finance for how investors fund a programme of projects rather than a single one.

All figures in this article are indicative ranges for UK refurbishment finance in 2026, confirmed only in a formal offer, and are not an offer, a quote or a financial promotion. Any facility is subject to lender terms, valuation and full underwriting. This article was written by Matt Lenzie.