Refurbishment lending doubles in a year

Over the previous 12 months to April lending totalled just £639m.

Duncan Kreeger, director at West One Loans, said: “Property is in seriously short supply in the UK. Solving the gridlock will take serious imagination – and better use of existing property.

“New lending practices are gradually bringing more properties into use – those which have been empty for too long.

“Conversion and refurbishment are just as critical to unlocking the supply of UK property. We need to make better use of the buildings we already have.”

Over the last six months 43% of intermediaries report growth in refurbishment and conversions while 52% also saw more ground-up property development.

However going forward 57% of brokers expect lending for property refurbishment to grow, while 52% of intermediaries anticipate more ground-up developments.

Intermediaries want lenders to do more to assist refurbishment projects, as over a third of brokers (36%) list property refurbishment and conversions as areas where they would like more product availability.

Just under one in five brokers (19%) said they started to offer short-term secured loans in response to the general recovery in the housing market.

Duncan Kreeger added: “Brokers understand the frontline of the property industry – and that is a scarcity of properties coming onto the market.

“Finance that can actually increase the pool of property in the system has always been even more useful than loans that simply facilitate purchases. But now this distinction is becoming even clearer.

“We need more homes in the places where people want to live, and more offices where successful firms can do business. In these cases prices are high and refurbishment can be very profitable.

“But only a handful of the most modern lenders have the flexibility and the funding lines to put the wheels in motion.”