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We’re over 70 and can’t get a loan to improve our new home. What ever happened to bridging finance?

Property Clinic: Despite having more than enough capital security to offer, none of the mainstream banks will lend to us

It can be difficult to secure even short-term finance once prospective borrowers are beyond a certain age. Photograph: Getty Images

Brigid Browne
Wed Apr 10 2024 - 05:45

My wife and I are retired and aged 71 and 72 respectively. We own two residential properties, neither subject to any debt, and wish to sell our current home and move to the smaller property having first refurbished and updated it. An issue arises in that we need to source short-term finance to carry out the refurbishment – what would historically have been classified as a “bridging loan”.

Despite having more than adequate capital security to offer, together with a clear exit strategy through the sale of our current home we now find that the mainstream banks do not in principle offer bridging loans nor are they prepared to lend in any form to over-70s. Where else might we source such funding?

Before I address your question, I wanted to say congratulations on having two debt-free properties. This must have taken enormous planning, not to mention sacrifice, over the years. I’m sure it will all be worth it when you finally downsize and realise your long-term plan of moving into the smaller home. Then it will be time to enjoy the nest egg that selling the second property brings. If I were a lending agency, and you came to me, I’d certainly back you all the way with your money-management capabilities.

I’m sure you looked in all the obvious places but, your local Credit Union may be willing to give a loan for upgrades. There is also the Housing Aid for Older People Grant for those aged 66 and over. You can use this grant for some essentials such as repair or replacement of the roof, upgrading the electrical wiring, the repair or replacement of doors and windows and for the installation of central heating (where there is no central heating, or it is broken beyond economic repair). This grant is means-tested and is aimed at those living in the home, so you may not qualify but perhaps some other readers may.

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Brigid Browne, chartered building surveyor and a member of the Society of Chartered Surveyors Ireland. Photograph: Andres Poveda

[ Bridging loans: would the return of this kind of finance help those who want to downsize to a smaller home? ]

Another source of funding might be the Sustainable Energy Authority of Ireland (SEAI). It offers a range of thermal and energy-upgrade grants. You might also look at an equity-release plan on your property. This is outside my area of expertise so you will have to seek advice from a financial adviser. You are likely to have drawn down your pension but if not, I believe you must do so by 75 years so there may be an opportunity here to avail of money not yet utilised. Again, this is not my field, but it might be worthwhile for you to speak to your pension broker or to get advice from the National Pension Helpline.

But let’s take a step back for a moment. Do you know how much money you need to do your refurbishment? Have you had someone throw a professional eye over it? Is it cosmetic or something more? Did you know that if you improve more than 25 per cent of the thermal envelope of the dwelling that your works may fall under what is defined as “Major Renovations” for purposes of the Home Energy Grant? To meet the requirements of this scheme you may have to look at solutions you had not previously considered? Perhaps you have looked at all of this already. Perhaps you know exactly what it is that is needed, as well as what you’d like.

It is just as important, however, to consider what impacts your chosen upgrades may have on your property’s health. It is always advisable to consult a construction professional, such as a chartered building surveyor to conduct an analysis of the upgrade requirements.

They will be able to cross-check the suitability of the upgrade with the building’s ability to function properly and advise you on the best way to achieve your requirements without negatively impacting the performance of the building.

Brigid Browne is a chartered building surveyor and a member of the Society of Chartered Surveyors Ireland

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