Refurbishment Finance for a Residential Flip in Shrewsbury

The Scenario

Our clients wanted to acquire a residential renovation project in Shrewsbury, complete light-to-moderate refurbishment works, and then sell the property as a “flip” to repay the borrowing.

They were experienced homeowners with strong practical capability and reliable trade contacts, which meant the refurbishment programme could be delivered efficiently and cost-effectively. Importantly, they had the cash available to fund the works themselves, and required finance primarily to complete the purchase and associated costs.

Key figures:

• Purchase price agreed: £265,000

• Refurbishment budget (client funded): £40,000

• Anticipated resale value (actual market listing): £475,000

• Term required: 12 months

• Exit strategy: Sale of the refurbished property

• Fallback exit: Let the property post-works if the sale market softened

The Challenge

This was not a standard “buy and sell” transaction.

The main complexities were:

1. Short-term time horizon – the clients needed a 12-month solution that supported a clear project timeline (works plus sale period).

2. Security and structure – the clients wanted to secure borrowing by leveraging existing property equity, while purchasing through an SPV.

3. Exit clarity – the lender needed a credible and well-evidenced sale exit, supported by a sensible cost plan and realistic contingency if the sale took longer than expected.

Our Approach

We packaged the case around what underwriters care about most in refurbishment-led transactions: security strength, project clarity, and a sensible exit.

• Clear project plan – we set out the works programme and timeframes, showing a realistic 3-month refurbishment window with adequate time allowed for marketing and sale.

• Strong security narrative – we positioned the transaction as a conservative, equity-led strategy, using existing property strength to support the borrowing.

• Exit and contingency – we provided a primary exit via sale, and a secondary 'plan B' via letting once works were complete, ensuring flexibility if market conditions changed.

• Lender fit – we selected a lender comfortable with a refurbishment-led strategy, an SPV purchase, and a short-term facility aligned to the project plan.

The Outcome

We secured a 12-month refurbishment-style facility structured to fund the purchase costs, with the clients retaining their own funds to complete the refurbishment works. Based on the updated resale expectation (£475,000), the project economics strengthened materially:

Example project appraisal (illustrative)

• Sale price (listed): £475,000

• Purchase price: £265,000

• Refurbishment: £40,000

• SDLT (additional property rates): £16,500 (illustrative)

• Agency fees: £3,000

• Solicitor fees: £3,000

• Finance costs: £30,000

• Total costs: £357,500

• Indicative profit (before tax): £117,500

Conclusion

Refurbishment and 'flip' projects are often straightforward in principle, but lenders still require the right story: conservative security, a clear works plan, and a realistic exit (with contingency).

This case is a good example of how the same project can become significantly more attractive when resale pricing moves in your favour, provided the structure remains sensible and the assumptions are evidenced.

If you are planning to acquire a renovation property and want to explore refurbishment finance, bridging, or equity-led borrowing strategies, we would be happy to review the numbers and help you structure the most suitable approach.