Mortgage lenders have been a bit slow to wake up to the fact that an increasing number of people are buying property specifically to renovate and sell on. In the last couple of years, however, several commercial and/or renovation mortgages have been established which should be of interest to the developer.

A quick search on the internet will reveal a huge number of brokers now willing to offer commercial mortgages to first-time developers, but some of the better deals can be found with the high street banks. They will almost certainly want to see some kind of financial or business plan.

The best kind of packages allow you to draw down money in stages, as the work progresses, which means you're not paying interest on money you don't yet need.

These packages are tailored to the developer's requirements. They are relatively quick to arrange, the lender knows you will sell once the work is complete, and they know, too, that the house could initially be a bit of a wreck. They tend to divide borrowing into two amounts, ringfencing one amount for the purchase of the property, and another amount for refurbishment costs.

On the down side, these mortgages aren't cheap. You are looking at up to 2.75% above base rate, and may only be able to raise a 60% loan this way so you will need to be able to find the remaining 40% from another source.