Short Term Loans For Flipping Houses

Short-term property finance to give you speed, flexibility and buying power when flipping houses

Borrow from £50,000 to £25m for 12 months, from as low as 0.55% per month.

 

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Short Term Loans For Flipping Houses

Property flipping can be highly profitable when you conduct thorough research and carefully manage your project. Get in touch with Clifton Private Finance for expert broker services.

Typically, securing development finance from a traditional lender can be a laborious process, and it can take several weeks or even months before the necessary funding is received.

A short-term loan or bridging loan is a specialist, fast, short-term financial solution that can be used to finance and refurbish a development property to sell on. Bridging loans are a popular option for property developers to fund their projects, as they can provide finance within a short period of time to minimise the delay in development.

Bridging loans generally come with the option to ‘roll up’ interest to repay at the end of the term of finance. This is ideal for property developers, as it allows them to avoid monthly interest payments and frees up their finances to spend on their projects.

  • Market leading short term loans from £50,000 to £25m.
  • Rates from 0.55% pm Lower rates for £1 million+ loans.
  • Finance within 7 working days is possible depending on your circumstances
  • Bridging loans for auction finance
  • Terms from 3 months to 3 years. LTVs up to 80% (can be more if other assets in the background). Interest roll up options
  • Automated valuation option for properties under £1m

Bridging Case Studies

Low Cost Drawdown Bridging Loan for Development Exit | Case Study
Low Cost Drawdown Bridging Loan for Development Exit
Area
Kent
Capital Raised
£900k
Date
February 2025
Commercial Bridging Loan to Refinance Hotel Before Sale
Commercial Bridging Loan to Refinance London Hotel Before Sale
Area
London
Capital Raised
£13.8m
Date
January 2025
Resolving Complex Debt Issues with a Bridging Loan | Case Study
Resolving Complex Debt Issues with a Bridging Loan
Area
Romford
Capital Raised
£135k
Date
November 2024

 

Why Our Customers Trust Us

In a competitive property market, bridging loans offer a strategic advantage, providing rapid access to funds to secure lucrative opportunities.

business finance rates

Market-Leading Rates

We provide access to market-leading rates for every client, thanks to our relationships with close to 100 bridging lenders.

Award Winning Team

Multi-Award-Winning Team

Our team of bridging advisers have over 40 years of experience and are qualified to the highest level. We're proud to have numerous customer service awards to our name.

independent advice

Fully Independent

As an independent brokerage, we focus on your best interests when comparing short-term property finance: from costs and terms to speed of service.

To book a free, no-obligation call with an adviser to discuss your options, contact us today.

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Our Experts

Our dedicated bridging finance team are CeMAP qualified and have over 40 years of experience. Meet The Team

Fergus Allen

Head of Bridging CeMAP

 

Mathew Phillips

Senior Finance Broker CeMAP

 

Paige Dumpleton

Finance Broker CeMAP

How We Work

1. Get a Customised Quote

Our bridging specialists will take a detailed look at your plan and provide a sense-check on whether it’s achievable, what the terms and cost estimates are, and if indeed short-term property loans are the best route for you.

 

2. Secure A Decision in Principle

Within 24-48 hours, we should have your Decision in Principle secured from the lender. You can present this to estate agents and sellers to showcase your buying power. We can also speak to each party directly to strengthen your case.

3. Submit Your Application

When you’ve had your offer accepted, we’ll submit your application, and the valuation process and legal work can begin. We'll act as a mediator between all parties, making sure the deal is progressing as efficiently as possible and smoothing out any complexities along the way.

4. Finance Your Purchase

We will keep you updated and informed until you receive funds from the lender and your transaction is complete. And for any queries you have throughout the course of your short-term property loan, we’re always here to help.

Speak to a bridging specialist today

Make your property ambitions a reality and find out if bridging finance could work for you. We’ll guide you through the process and take care of the heavy lifting.

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Short Term Loans For Flipping Houses

with Fergus Allen & Sam Hodgson

Last Updated: 29/01/2025

 

 

What Does it Mean to 'Flip' a Property?

In basic terms, it is buying a property at a certain price and then adding value through renovation or refurbishment work and then selling the property for a higher price.

Property flipping can be highly profitable when you conduct thorough research and carefully manage your project. But in order to be successful, you’ll need to have a solid understanding of the local market and to develop realistic financial projections before pursuing a flip. 

When to Use a Property Development Bridging Loan

Bridging loans can be used to facilitate many different development projects including:

  • Extensions
  • Conversions
  • Structural amendments
  • Refurbishments

(See our refurbishment loan guide)

As a general rule, traditional lenders are reluctant to provide finance for an unmortgageable property.  A property is deemed unmortgageable by traditional lenders if the value of the property is below 40K or it does not have a functioning bathroom or kitchen. Unlike the finance offered by traditional lenders, bridging loans can be secured for the purchase and development of unmortgageable properties, making sure that developers do not lose out on attractive "flip" opportunities.  

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Is House Flipping Risky?

Yes, house flipping can be risky, and it's important to understand these risks before entering the market. 

Preparation is key when it comes to any kind of development project, and the more familiar you are with what could go wrong, the easier it will be to manage the project successfully.  

Here’s what you should be wary of: 

  • Renovation Costs - Underestimating renovation costs is a common risk in house flipping. Unexpected repairs, materials, or labour expenses can quickly erode profit margins or even result in losses. 
  • Time Constraints - In order to minimise costs and maximise your ROI, you’ll need excellent project management skills. Delays in renovations or challenges in selling the property can lead to increased expenses, which can eat into your profits. 
  • Legal Risks - For some projects, you’ll need planning permission, and for properties like Grade-II-listed buildings, there will be additional regulations you’ll need to follow. Failure to comply with local regulations could result in fines, delays, or forced corrections, all of which can impact profitability. 
  • Property Condition - It’s common to find a diamond in the rough that you want to give a new lease of life. In many cases, you can find a great deal (especially if you buy at auction), and your hard work will result in a unique home with twice the value. But sometimes, you may bite off more than you can chew. Buying distressed properties risks encountering unforeseen structural issues, code violations, or environmental hazards, which can increase renovation costs and lower potential profits. 

Case study: Read our case study below on how we secured bridging finance for a fix-and-flip in Fife

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Is it Your First Time Flipping a Property? Here Are Some Tips 

Once you have some development experience under your belt, mitigating the risks we’ve covered will likely be second nature to you. But here’s what you can do to ensure your first property flip project goes as smoothly as possible:  

  • Do Your Research: Take the time to learn about the property market in your target area, property values, renovation costs, and property regulations set by the local council.  
  • Create a Detailed Plan: Develop a comprehensive business plan outlining your goals, budget, timeline, target market, and exit strategy. Include detailed estimates for renovation costs, holding costs, and potential selling prices to ensure that your project is financially viable. 
  • Find the Right Property: Conduct thorough research to identify potential properties for flipping. Look for distressed or undervalued properties in desirable neighbourhoods with strong market demand. Consider factors such as location, condition, potential renovation costs, and potential resale value when evaluating properties. 
  • Perform Due Diligence: Before purchasing a property, conduct a comprehensive inspection to identify any structural issues, code violations, or other potential problems. Obtain multiple quotes from contractors for renovation costs and carefully review the property's financials to ensure that the numbers add up. 
  • Assemble a Team: Surround yourself with a team of experienced professionals, including real estate agents, contractors, inspectors, and legal advisors. Build relationships with reliable contractors and subcontractors who can help you complete the renovation on time and within budget. 
  • Manage Renovations Carefully: Develop a detailed renovation plan and schedule to guide the renovation process. Communicate regularly with your contractors to ensure work progresses smoothly and according to plan. Monitor expenses closely to avoid cost overruns and delays. 
  • Market the Property Effectively: Work with a real estate agent to develop a marketing strategy to attract potential buyers. Use professional photography, virtual tours, and staging to showcase the property's features and maximise its appeal. Price the property competitively based on market comparables to attract offers quickly. 

One of the primary traps you can fall into as a beginner developer is treating your property flip like a pet project instead of a business investment. When faced with a myriad of choices when refurbishing your property, it can be tempting to lean towards your personal preferences. This is a cardinal sin when it comes to property development. Your decisions will need to be informed and profit-driven if you want to get the most out of your project. There are some exceptions to the rule, of course, but when you’re just starting out, it’s important to have a buyer in mind. 

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What’s a Good ROI for Flipping Houses? 

A minimum ROI of 10-20% is a good target for house-flipping projects.  

Property values and market dynamics can vary significantly across different regions in the UK. Properties in prime locations or areas experiencing gentrification tend to command higher selling prices and offer greater profit potential. The market can also influence what ROI you can expect. Factors such as supply and demand, interest rates, and economic conditions can influence the profitability of house-flipping projects.  

A strong seller's market with high demand and limited inventory may present more lucrative opportunities. It’s also important to know how much it will cost to renovate a property. You can get a bargain at auction across the UK, but significant renovations can outweigh the buying costs. 

Here's a breakdown of how ROI is calculated for house flipping: 

  • Calculate Total Investment: This includes the purchase price of the property, closing costs, renovation costs, financing costs, and any other expenses incurred during the flip. 
  • Determine Selling Price: Estimate the expected selling price of the renovated property based on market comparables and the property's condition and features. 
  • Subtract Selling Expenses: Deduct selling expenses such as real estate agent commissions, closing costs, and any other costs associated with selling the property. 
  • Calculate Net Profit: Subtract the total investment and selling expenses from the selling price to determine the net profit from the flip. 
  • Calculate ROI: Divide the net profit by the total investment and express the result as a percentage to calculate the ROI. 

Case study: Read our case study below on how we raised £1.94m capital to redevelop and sell a family home in Wimbledon

What is the 70% Rule in House Flipping? 

The 70% rule states that you shouldn’t pay more than 70% of the after-repair value (ARV) of a property, minus the estimated repair costs, when purchasing a property for flipping.  

Here’s how it works: 

A breakdown 

  • After-Repair Value (ARV): This is the estimated market value of the property after it has been renovated and is ready to be sold. The ARV is typically determined by analysing comparable sales (comps) of similar properties in the area that have been recently renovated and sold. 
  • Repair Costs: These are the estimated costs of renovating and repairing the property to meet market standards. Repair costs should include expenses for materials, labour, permits, and any other associated costs with the renovation process. 

By adhering to the 70% rule, investors aim to ensure that they have a sufficient margin of safety to cover renovation costs, holding costs, and financing expenses and still achieve a desirable profit margin when selling the property. 

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How Long Does It Take to Flip a House? 

The average property flip typically takes around 6 to 9 months to complete, but this can vary. It’s likely that your first property flip project may take a bit longer, which is where room flexibility on your finance terms may be helpful. 

If extensive renovations are required, or if there are delays due to unexpected complications, you can expect the process to take up to 12 months. Similarly, experienced flippers with efficient project management skills may be able to complete flips more quickly, sometimes within a shorter timeframe of 3 to 6 months.

How to Finance a Property Flip in the UK 

If you plan on undertaking a property flip, let us take the heavy lifting out of your finance application. At Clifton Private Finance, we have a team of expert financial advisers who can offer you tailored guidance.  

Our award-winning bridging team can advise you on the options available to you and connect you with the most suitable lender for your circumstances. As a whole of market broker, we have relationships with specialist lenders, private banks, family offices and wealth managers. This offers us access to market-leading rates and bespoke finance solutions. 

Frequently asked questions

You can find the most common questions asked about bridging loans below. If you have a question that isn't answered here, please email us at helpdesk@cliftonpf.co.uk

About Bridging loans

Here are some of the most common alternatives to bridging loans:

  • Second-charge mortgages
  • Remortgaging
  • Equity Release
  • Personal Loan
  • Savings or Family Support
  • Development Finance
  • Commercial Mortgages
  • Refurbishment Loans

We break down each of these other financing tools in our full guide to alternatives to bridging loans

While none of these options provide the flexibility, loan size and low interest rates that bridging loans do for property transactions, you may find they are more appropriate finance options for your specific situation.

No, there is no strict age limit for securing a bridging loan. 

Bridging loans are typically 12 months in duration, which means that there aren't age limits in place like there are for mortgages that can last for 25+ years. 

The main example where age may be an issue is if you plan to refinance your bridging loan with a standard mortgage. In which case, you'll need to be eligible for a standard mortgage to qualify for your bridging loan - and if you are approaching retirement age, this could be an issue and you may be rejected for a bridging loan.

However, we work with specialist equity release and lifetime mortgage lenders that can provide a Decision in Principle for later-life lending (if it's feasible) so that your bridging loan can be approved if it makes sense with your broader strategy. 

No high street banks currently offer bridging loans. Instead, bridging loans are provided by specialist short-term finance lenders.

At Clifton Private Finance, we are a whole of market brokerage that deals with multiple bridging loan lenders, and we act as an intermediary between clients and the lender ensuring the process is smooth and hassle-free, and making sure our clients are getting a good deal.

There are two types of bridging finance: regulated bridging loans and unregulated bridging loans.

It simply depends on the intended use of the property you're purchasing. 

When you or a family member intend to live in the property you’re purchasing with your bridging loan, you’ll need a regulated bridging loan.

If you're getting bridging finance on property that you or a family member will not be living in, or if it’s a commercial property, then you’ll need an unregulated bridging loan (commercial bridge loan). 

And if you intend to sell the property to repay your bridging loan (flipping the property) instead of refinancing or selling another property, you’ll get an unregulated bridge loan.

Regulated bridging loans are authorised and regulated by the FCA and are usually locked to a 12-month maximum term.  Unregulated bridging loans, meanwhile, can have extended periods of up to 36 months and are generally more flexible.

If you’re unsure, it’s best to speak to a qualified adviser to go over exactly what you need and find the best bridging loan for you.

Yes, bridging loans are generally considered safe provided they are used for suitable property transactions. Speaking to a bridging loan adviser is recommended if you're unsure about the risks and suitability of a bridging loan for your situation. 

Generally speaking, the main risk of a bridging loan is that if you cannot repay the loan, your property can be repossessed and sold to clear your debt.

For example, if you take out a bridging loan to buy a new property but your existing property fails to sell and you cannot recoup the funds, this could become a risk. However, bridging lenders always require their own valuations for any property involved in a bridging transaction to combat this.

Another example could be that you're unable to secure a mortgage to refinance your bridging loan. At Clifton, we make sure your remortgage plans are sound if this is your bridging loan exit strategy, and can even arrange your mortgage for you through our dedicated mortgage advice service on the other side to smooth the process.

Repayments

You cannot turn a bridging loan into a mortgage, but you can repay a bridging loan with a mortgage and effectively refinance it into a long-term arrangement. 

This is common when buying an unmortgageable property with a bridging loan, carrying out refurbishments, and then mortgaging it once it is wind and water-tight and a new valuation has been carried out. 

This is also common for properties bought at auction where a mortgage would be too slow to arrange, and so a bridging loan is used which is then replaced with a mortgage later.

A bridging loan exit strategy is simply the way in which you plan to repay your bridging loan. 

The most common exit strategies are selling an existing property, selling the property you're purchasing, refinancing with a mortgage, or a combination. 

Other more unique exit strategies can include selling a business, receiving a pending inheritance, or receiving a large tax rebate.

You do not pay monthly instalments towards the capital loan of your bridging loan. Some bridging loans require you to repay the interest accrued each month, but most lenders will actually give you the option to roll this up into the loan value, meaning you repay it with your lump sum at the end and have absolutely no monthly commitments. 

It's worth noting that as soon as you pay off most bridging loans, you stop accruing interest - so, the quicker you pay it off, the less expensive it will be, and there are typically no ERCs (early repayment charges).

If there is a purchase involved, bridging loans are paid from the lender to the lender’s solicitor, then to the client’s solicitor, and then to the seller’s solicitor - so, you as a client will not see the funds in your own account - similar to a mortgage.

If there is no purchase involved (for example, for a bridging loan for home improvements before selling), the funds go from the lender to the lender's solicitor, to the client’s solicitor, and then to the client's bank account. 

In terms of how bridging loans are repaid by you, they are repaid as a lump sum, either at the end of your term or during it. You can choose to either 'service' the interest, so pay the interest back monthly, or roll it up into the value of the loan to also pay this off as a lump sum along with the capital.

Deposits and terms

Regulated bridging loans (for residential properties) are typically 12 months, however, some non-regulated bridging loans for buy to lets and commercial properties can be up to 36 months. 

Some lenders are more flexible on term durations than others, and it can be a case-by-case basis as to whether you'll get approval for a longer loan term.

Almost all regulated bridging loans are short-term, and have a duration of 12 months.

Bridging loans are short-term by nature. However, there can be some flexibility on term length, particularly for unregulated bridging. For example, bridging for development projects, flipping properties, buy to let bridging loans and commercial bridging loans can all have longer terms up to 36 months. 

Some bridging loan lenders allow you to extend your term if at the end of 12 months your property hasn't sold or your alternative funding hasn't come through yet - however, this is down to the lender's discretion and there are no guarantees. It's important to be aware of the risks of bridging loans, and your property can be seized and sold to compensate for failure to repay. 

You can effectively secure a loan for 100% of a property value, but only if you have other property as security to keep your overall loan-to-value below 80%.

So, if you're getting a loan for 100% of a property value, you'll need another property in the background to secure it against. 

The easiest way to see if you're eligible is either to give us a call or use our bridging loan calculator that automatically calculates your LTV.

You don't necessarily need a deposit for a bridging loan in the traditional sense of cash reserves, but you do need security for your loan in the form of another property or asset to keep the loan-to-value below 80% at a maximum.

For example, if you're buying a £300k property with a £300k bridging loan, you'd need another property to secure the loan against along with the property you're buying, or else your loan to value would be 100%. 

Miscellaneous

Understanding the difference between net and gross calculations is essential when comparing deals from bridging loan lenders.

The calculation determines the maximum LTV (Loan-to-Value), how much you can borrow, and how much you will eventually repay.

Here’s the difference:

When calculating the net loan amount for bridging loans, the borrower deducts the loan costs and additional fees (such as the arrangement fee) from the total loan amount - this is known as net loan calculation.

Contrary to that, gross loan calculation is based on the loan amount the borrower can receive without deducting any costs or fees.

In brief, the gross loan calculation represents the total amount available to the borrower, while the net loan represents what the borrower ultimately receives after deductions.

Which calculation do lenders use for bridging loans?

A common complication arises when it comes to comparing bridging lenders, as different lenders advertise their bridging loan products differently. The upshot of this, is that it can become difficult to determine if a higher LTV (loan-to-value) represents the actual amount you could receive.

Lenders typically use a gross loan calculation when advertising or promoting their bridging loan products.

This is because the gross loan amount represents the maximum loan amount the borrower is eligible to receive, and can be used as a marketing tool to attract potential borrowers.

Nevertheless, the net loan calculation is used when negotiating an agreement, which is the amount the borrower will receive after deducting fees and other costs.

Borrowers are responsible for repaying this amount, and lenders will use that amount to determine repayment schedules and other loan terms.

How a broker can help with bridging loan calculations

A broker can assist with bridging loan calculations by providing clarity, expertise, negotiation skills, and a comparison of loan options to help you make more informed decisions.

A first charge bridging loan refers to a bridging loan that is the only charge against the property, i.e., there is no existing mortgage on that property.

A second charge bridging loan is when there is already a mortgage on the property that the bridging loan is being secured against. 

In the event of repossession, the 'first charge' has the legal right to be repaid first, before the second charge, which is why second charge loans can be slightly more expensive as they're a greater risk to lenders.

It is still entirely possible to secure a second-charge bridging loan and they are common within the industry. 

Yes, your bridging loan lender will require a new valuation to be carried out for all properties in your bridging loan transaction. 

In some cases, we can work with lenders that can facilitate a 'desk valuation', which is a valuation carried out online based on the local property market, images of the property and the specifications of the home - this can save a considerable amount in fees and speed up your application, but it's not always possible, especially for higher value properties. 

Yes, you can get a bridging loan with bad credit. 

While lenders will look at your credit score and factor it into your application, there is no requirement for regular loan servicing with a bridging loan, and so your income is not analysed and your credit score is significantly less important than with a mortgage. 

Using funds from a bridging loan to purchase a property puts you in a strong position as a buyer - similar to that of a cash buyer. 

Being a cash buyer is attractive to sellers because there is no onward chain requirement, and the funds are ready to go for the purchase.

Using a bridging loan also eliminates the need for the chain to complete, and puts you in a position where funds can be available in a matter of weeks for completion; effectively rendering you a cash buyer to prospective sellers.

Let us do all the hard work of finding the right bridging lender for your circumstances. We secure bridging finance for applications of all types, and we negotiate competitive lending to meet your needs and timescales.

Fergus Allen
Head of Bridging CeMAP

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