Renovation and Conversion Finance Frequently Asked Questions

What’s Stopping You?

Below are just some of the questions people have when planning a project and the ways in which BuildStore can help.  If you have any other questions call us on 0845 223 4888 or request a callback from one of our advisors.

Will I need a lot of savings to renovate or convert a run down property?

• Not necessarily.  With Accelerator you can start your project with a relatively small deposit and borrow up to 95% of your land costs and up to 95% of your build costs.
• If you do have substantial savings however or access to other cash then you may prefer to use an arrears stage payment mortgage.  Whatever your circumstances our advisors will find the best product to suit your needs.

Will I have to sell my current house before my new home is ready?

• This will depend on how you wish to finance your build and how much cash you have in savings.  If you choose an arrears stage payment mortgage then you will need sufficient money for a deposit of between 15 and 25% of the property cost as well as money to pay for the materials and labour for the early stages of the building works.  If you do not have sufficient savings then you may decide to sell your current house before starting your new project.
  
  If you don’t want to sell your existing house and move into temporary accommodation before your new home is complete then Accelerator may be right for you.  Receiving your stage payments in advance will ensure that cashflow is not an issue during the project so you can continue living in your current house until you are ready to move.  No costly furniture storage, no caravan on site – Accelerator is convenient and flexible.

Is there only one type of mortgage available for renovating or converting?

• The Accelerator Mortgage is supported by a panel of leading lenders including Skipton Building Society and BM Solutions which is part of HBOS. This selection means that we can recommend the right mortgage to suit you and your project including the mortgage type (discount, tracker, fixed rate etc), repayment method and repayment terms.
  
  Similarly, arrears based renovation and conversion mortgages are also available from a number of different lenders offering a variety of terms.
  
  Mortgage products change on a regular basis so call us to find out what is currently available.

How will I know which mortgage is right for me?

• Our qualified advisors will talk through your project and finances carefully to ensure that they fully understand your requirements.  They will then make recommendations about the best mortgage for your circumstances.  All of our advisors specialise in renovation and conversion mortgages and are trained to give you the best possible advice.

How can I be ready to buy a property as soon as it becomes available?

• Talk to our mortgage advisors now and we can start the ball rolling even before you have found a project.  We can talk you through the various options for financing your renovation or conversion and work out how much you can borrow based on your current finances and commitments.  We can also review your existing mortgage and, for example, arrange a remortgage with a cash drawdown facility that will make it easier to put an offer on a property as soon as it becomes available.

How can Accelerator make advance stage payments but other renovation mortgages do not?

• To enable money to be released in advance and provide a positive cash flow, BuildStore has designed a unique additional cash flow benefit scheme. This provides the additional security required by the lender to not only allow them to release money at the start of each stage of the build but to also allow a higher percentage of the costs to be lent during the project by some lenders.
• The scheme ensures that you can borrow the amounts you need for each stage when you need them as the funds will be released as per the cost of your building work and will not be subject to confirmation by a mortgage valuation at every stage*.
• The cost of the scheme is met by you through the Additional Cash flow Benefit Fee (or ACB fee) but the savings made by not needing interim valuations at each stage of the build and the benefits of the positive cash flow provided mean that the overall cost of the project can be lower. In addition with most lenders because you are not waiting for valuations to be carried out before each stage payment is released, money is released more quickly, speeding up the completion of the project
• The minimum fee is £262.50 and the maximum additional cashflow is usually £85,000 although it may be possible to have a higher amount.

Do I have to pay VAT if I am renovating a property?

• VAT is payable during a project but recent changes to the rules have reduced the rate of VAT to 5 per cent, rather than 17.5 per cent, on the cost of works and materials used to renovate properties that have been empty for a minimum of two years.   Previously, this discount only applied to properties that had been unoccupied for three years or longer. This brings significant tax saving benefits to many more renovators making these projects even more attractive.

Does BuildStore only offer advance stage payment mortgages?

• No.  The BuildStore advisors have access to the whole mortgage market so if they consider an arrears renovation or conversion mortgage is more suitable for you once they have established your circumstances, that is what they will recommend.

What is the position on stamp duty?

• One of the benefits of renovating a property is that it is better value than buying a completed property.  One area you get better value is in stamp duty as you only pay this based on the purchase price of the building being renovated and not on the value of the completed house.

Not yet ready to build? 

• BuildStore is the UK’s leading provider of finance to the self build and renovation marketplace but we also offer a full mortgage brokering service to find you the right deal on your mortgage whether you are buying a house, looking to lower your monthly payments or remortgaging your existing home to release equity.
• We operate on a ‘Whole of Market’ basis and have access to all of the top lenders as well as to mortgages available on an exclusive basis and will provide you with a level of expertise and knowledge not available by going direct to a lender.

Do I have to deal with you by telephone?

• We appreciate that you may prefer to discuss your mortgage requirements face to face with an advisor rather than over the ‘phone.  That is why you can meet with an advisor at The National Self Build and Renovation Centre in Swindon or the Scottish Self Build and Renovation Centre in Livingston (we always recommend calling to arrange an appointment with an advisor before making a special journey).

Call 0845 223 4888 to speak with one of our advisors or request a call back online.
Lines are open between 8.30am and 7.00pm Monday to Thursday, 8.30am to 5.00pm on Friday and 10.00am and 1.00pm on Saturday.

*Some lenders reserve the right to ask for an interim valuation later in your project to check on progress and Skipton Building Society require interim inspections at every stage.

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