Conversion Finance
Office-to-residential, HMO conversion, barn conversion and change of use ” specialist finance for projects that standard lenders won't touch.
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No upfront fees · Business enquiries only · Min. £25,000
What is Conversion Finance?
Conversion finance funds projects that change the use or configuration of a building ” office to residential, commercial to residential, houses to HMOs, barns to dwellings and similar projects. These transactions often involve planning permission (or permitted development rights) and are considered complex by standard lenders. Specialist bridging and development finance lenders have the experience and appetite to assess these projects on their merits.
- Office-to-residential (Class MA permitted development or full planning)
- Commercial-to-residential change of use
- House to HMO conversion
- Barn and agricultural building conversion
- Care home, hotel or pub conversion to residential
How Does Conversion Finance Work?
Planning and PD Rights Confirmed
Most conversion finance lenders require planning permission or confirmed permitted development rights before advancing funds.
Initial Advance
The bridge or development loan advances an initial sum against the purchase price of the property being converted.
Conversion Works
Funds are drawn down in stages as works progress, certified by a monitoring surveyor on larger projects.
Practical Completion
The property is legally converted to its new use. Building regulations sign-off (if applicable) is obtained.
Exit
Completed residential units are sold or refinanced to buy-to-let mortgages. HMOs refinance to specialist HMO products.
How is Conversion Finance Secured?
Conversion finance is secured by a first legal charge over the property being converted. The lender values both the current use value and the projected value in the new use (GDV). Some lenders require the planning consent or PD right to be formally documented before completing.
Exit Strategy
All lenders require a credible exit strategy before funds are released. Common exit routes include:
- Sale of completed residential units
- Buy-to-let mortgage on completed units once tenanted
- Specialist HMO mortgage after licencing
- Commercial mortgage if retaining any commercial element
Is Conversion Finance a Good Idea?
Advantages
- Creates value from non-residential or underutilised assets
- Permitted development rights often avoid lengthy planning process
- Office-to-resi conversions can create units at below-development-cost prices
- Strong demand for HMO rental accommodation in many locations
Considerations
- Planning delays and condition discharges can extend the bridge term
- Building regulations and fire safety compliance add cost and complexity
- Narrower lender market than standard bridging
- HMO licencing requirements vary by local authority
How to Secure Conversion Finance
Confirm Planning Status
Verify whether your project qualifies for permitted development (e.g. Class MA for office-to-resi) or requires full planning. Pre-application advice from the local planning authority reduces uncertainty.
Prepare Conversion Plans
Architect drawings, a schedule of works and a building regulations strategy demonstrate the scheme is well-planned and deliverable.
Submit Enquiry
Provide property details, current use, proposed new use, planning status, works schedule and exit strategy. We identify lenders with conversion experience.
How Much Can I Borrow?
Loan amounts for conversion finance are based on the GDV of the completed scheme, similar to development finance.
- Up to 65“70% of post-conversion GDV
- Day-one advance: up to 70% of current use value
- Minimum loan: £100,000
- Larger schemes up to £10m+ considered
Want to calculate your exact costs?
Use our free calculator to model loan amount, monthly interest and total costs.
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How Quickly Can I Get a Loan?
Initial drawdown: 3“5 weeks from application. Conversion projects typically take 3“18 months depending on scope and size.
Eligibility Criteria & How to Apply
- UK-based company, LLP or experienced individual investor
- Property with planning consent or confirmed PD rights for conversion
- Detailed works schedule and cost breakdown
- Credible exit ” sale or specialist mortgage
- Adverse credit considered on merit
- Minimum loan £100,000
9 Example Uses of Conversion Finance
Office to Flats (PD)
A redundant 2,000 sq ft office with Class MA PD rights converts to 8 studio apartments. Development finance funds acquisition and works; units sold on completion.
HMO Conversion
A 4-bed house converts to a 7-bed licensed HMO. Heavy refurb bridge funds the conversion; specialist HMO mortgage refinances.
Barn Conversion
An agricultural barn with planning for 3 residential dwellings converts. Specialist rural lender accepts the conversion and exits to individual sales.
Pub to Flats
A closed pub with planning converts to 5 flats. Bridge funds acquisition and works; BTL mortgages refinance on tenanting.
Care Home to Resi
A former care home with planning converts to 12 apartments. Development finance structures the project; units are sold.
Church Conversion
A redundant church with residential planning converts to 6 unique apartments. Specialist lender experienced in unusual properties.
Industrial to Live/Work
A light industrial unit converts to live/work units under PD rights. Bridge funds acquisition and conversion.
Hotel to Flats
A small hotel with planning converts to 20 residential units. Development finance covers the full project.
Adverse Credit Developer
A developer with historical defaults has a proven conversion track record. Specialist lender assesses scheme on merit.
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