According to a report from Paragon, around 81 per cent of landlords make some level of improvement to each new property they purchase.
The bank found that almost a quarter spend over £25,000 on average on this improvement work, while almost a fifth spend between £10,000 and £20,000.
Some of the big drivers for this refurbishment work is the potential to achieve both higher rents and property values through this refurbishment work.
Two-thirds of respondents said they want to make improvements in order to boost their rents, while more than half were motivated by increasing the capital value.
The study found that typically landlords expect to see a 19.8 per cent jump in the value of the property and a 16.5 per cent increase in rental income after the work has been completed.
However, money isn’t the only factor. Paragon’s research found that for 83 per cent of landlords, providing a good quality home to tenants is a consideration, with a similar figure wanting to make the property more attractive to tenants.
Almost half said they were looking to carry out improvements for energy efficiency reasons.
Painting and decorating was by far the most common improvement, carried out by 95 per cent of landlords, followed by the installation of a new bathroom, kitchen or boiler at 78 per cent.
The lender added that landlords were actively search out these ‘project’ properties. Around 40 per cent of landlords prefer to purchase a property in need of refurbishment, compared with 21 per cent who opt for properties which are immediately ready for tenants to move into.
Richard Rowntree (pictured), managing director of mortgages at Paragon, argued that landlords have helped drive improvements in housing standards across the rental sector over the past 15 years, and central to that had been their efforts in upgrading stock.
He continued: “The vast majority of landlords will look to upgrade each new property to boost the capital value and the potential rental income. However, they also do this out of a genuine desire to provide a good quality home to their tenants.”
