Specialist lender Octane Capital has reported a rise in demand for refurbishment finance as property investors seek faster routes to market and ways to manage rising renovation costs.
Analysis by the lender showed that the average cost of a full refurbishment on a typical three-bedroom property has increased by £2,616 over the past 12 months, from £76,690 in 2024 to £79,306 in 2025.
In response, more investors are opting for short-term finance products specifically designed to fund renovation works.
These products offer quicker access to capital, enabling projects to proceed without delay and allowing properties to be let or sold sooner. According to Octane Capital, refurbishment finance has become a key strategy for investors looking to maintain margins amid increasing costs for materials and labour.
Encouragingly, while renovation costs have gone up, the cost of securing a 12-month refurbishment loan has decreased slightly.
Based on the current average project value of £79,306, the cost of finance has dropped from £12,834 in 2024 to £12,612 in 2025.
This is largely due to a fall in the Bank of England base rate, which has pushed the average monthly loan rate down from 0.79% to 0.76%.
Jonathan Samuels, chief executive of Octane Capital, said: “The property investment space has had to contend with considerable cost increases, from materials to labour.
“As a result, refurbishment finance has become an essential route to unlocking capital and progressing with projects in a timely manner.
“The fact that funding costs are slightly lower year-on-year is positive, and with the added benefit of speed and flexibility, it’s no surprise that more investors are choosing this method to get their properties market-ready and income-generating faster than ever.”
