Learning outcomes
By the end of this guide, you will be able to:
- Understand how refurb buy-to-let works and where it fits a landlord’s needs.
- Identify the benefits of combining short-term refurb-to-let finance with longer-term buy-to-let lending.
- Advise clients on selecting suitable properties and added-value refurbishment strategies
- Understand lender criteria for refurbishment buy-to-let mortgage product.
What is refurb buy-to-let?
Refurb buy-to-let, often referred to as refurb-to-let, is an investment strategy where landlords purchase tired or unlettable properties that require cosmetic improvements, enhance them through light refurbishment, and then let them out on a standard buy-to-let mortgage.
Historically, this involved arranging bridging finance for the works and then remortgaging with a buy-to-let lender, at significant cost (and time) to the landlord. Today, specialist refurbishment buy-to-let products allow landlords to complete both stages with a single lender, simplifying the process and reducing costs and admin.
Why landlords are choosing refurb-to-let
The refurb-to-let model offers a range of benefits for proactive landlords:
- Buy at a lower price point - Renovation properties are typically priced below turnkey homes.
- Increase rental yield and property value - Simple upgrades can boost both monthly income and capital value.
- Future-proof an investment - Refurbishment can improve energy efficiency and compliance with ever changing regulations.
- Reduce stamp duty impact – Naturally, buying a property at a lower market value will result in lower upfront taxes for landlords.
- Controlling the finished product - Landlords can tailor their investment property to their target tenant demographic.
Phil Riches, Sales Director at Keystone Property Finance comments: "There is growing demand for short-term lending solutions in the buy to let market, and Refurb to Let products meet this need. These products allow brokers to secure short-term financing for refurbishments and easily transition to a fixed-rate buy to let mortgage.
At Keystone, our Refurb to Let offering enables borrowers to move to a fixed rate after refurbishment, saving time and money. With a free revaluation and no exit fees or early repayment charges, the transition is both efficient and cost-effective."
Potential challenges of refurbishment buy-to-let
Refurbishment buy-to-let requires careful planning and consideration and may involve the following challenges:
- Financing complexities - Using two separate lenders can add admin work and increase costs so plan ahead – it may be more beneficial to utilise the same lender for all lending.
- Timing pressures - Delays in works can impact cashflow and exit.
- Lender Restrictions - Not all lenders accept properties requiring works.
- Cashflow Strain - Clients may face upfront costs before the property is lettable, so a proper refurb strategy is essential.
Key considerations for brokers
When discussing refurb buy-to-let with clients, brokers should consider the following:
- Scope of work - Is the project a light refurb or a more complex renovation? Most lenders focus on light works only – so to avoid a DIY SOS moment your client must stick to a budget.
- Exit strategy - Is the intention to hold or sell? Clarity is key for lender approval.
- Lender options - It may be more beneficial to use lenders offering combined refurb-to-let packages for a smoother journey into your clients standard buy-to-let mortgage.
- Valuation uplift - Will the post-refurb value support additional borrowing? Something to consider if your client is looking to unlock capital or increase the mortgage as a result of the refurb.
- Borrower experience - Lenders favour experienced landlords with solid experience.
Phil comments: "When placing a buy to let case, it's essential to understand both the client and property in question to be able to meet the lender’s requirements. Some lenders may not finance first-time landlords or may limit loan amounts, so gathering details upfront is crucial to allow for a seamless application process.
It's also essential to understand your client's goals in order to find the most suitable financing options for them. If they are looking to unlock capital, our Refurb to Let range allows borrowers to access up to 80% LTV on the exit product. This enables them to raise capital and expand their portfolios at the same time."
When is a refurbishment buy-to-let suitable?
- For investors seeking value-add opportunities - Boosting rental returns and capital growth.
- For clients priced out of prime markets - Refurb opportunities provide an entry point into competitive locations for clients with restricted investment budgets.
- For landlords with a long-term strategy - Improving EPC ratings, property layout and tenant appeal will maximise your clients end results.
- For experienced landlords and professionals - Familiarity with refurb projects reduces risk, and experienced landlords are looked at more favourably by lenders for this type of product.
When is refurbishment buy-to-let not suitable?
- For first-time landlords without renovation experience - This strategy requires experience, and lenders will consider this when evaluating each case.
- For properties needing major works – For example, structural refurbishments and properties that require planning permissions may not qualify for typical refurb-to-let lending.
- For passive investors - Time, energy and project oversight are essential.
- For clients needing immediate rental income - Refurbishment periods delay cashflow, so your clients must keep that in mind.
A working example of a refurbishment buy-to-let project
Here’s how a refurbishment buy-to-let project could work for a £250,000 property:
Scenario: Light refurb project – 2-bed flat in a commuter town
- Purchase price: £250,000
- Deposit (30%): £75,000
- Refurb loan (70% LTV): £175,000
- Refurbishment budget: £20,000 for kitchen, bathroom, flooring, and redecoration
- Works duration: 3 months
- Post-refurb value: £295,000
Following works, the landlord secures a buy-to-let exit mortgage at 75% of the new value:
- New mortgage: £221,250
- Equity released: £46,250
- Estimated rent: £1,250–£1,400 per month
Lenders such as Keystone may also offer:
- Free revaluation at exit
- Streamlined underwriting
- Retained broker fees across both loans
This approach turns a tired property into a high-performing asset, while allowing brokers to support their clients across both funding stages.
Conclusion
Refurb buy-to-let is a powerful tool for landlords looking to stay ahead in a more competitive and regulated market. With the right property, plan and finance, refurbishment buy-to-let can unlock strong returns, added equity, and better long-term tenant appeal. For brokers, mastering refurb-to-let products provides an excellent opportunity to add value, win new business and retain clients over the long term.
At NBTLAE, we’re here to help you navigate these opportunities and stay informed on the latest landlord lending solutions. Join us at the National Buy to Let Adviser Event on 3rd June in Coventry to connect with lenders and grow your knowledge of specialist BTL strategies.
Phil comments: "Refurb to Let is a great opportunity for landlords to enhance their investment returns. This approach involves purchasing properties that need renovations, increasing their value, and transitioning to a long-term buy-to-let strategy, which can lead to higher rental yields.
At Keystone, we offer short-term lending for properties requiring light refurbishment works and covering conversion from a standard property to a small HMO, where planning is not required. If you want to learn more about how Refurb to Let can benefit your landlord clients, visit us at the National Buy Adviser Event on June 3rd or contact our expert team today.
Alternatively visit www.keystonepropertyfinance.co.uk/broker/about-us/contact-us/ to find out more."
