Shawbrook Bank research revealed 62 per cent of landlords renovated at least one of their rental properties in the last year, with 18 per cent updating more than one.
Almost 20 per cent of those used credit cards or short-term finance products to complete the project, but the majority harnessed their own finances and 12 per cent used an inheritance or windfall. A further 12 per cent used a second charge mortgage loan.
The survey found that the last year provided an opportunity to undertake improvements to their properties. With more experiencing a gap between tenancies, taking the opportunity to refurbish allowed them to improve the property without causing disruption, with 14 per cent of landlords saying they chose to renovate because they had an extended period between their previous and incoming tenants.
Larger property holdings
Portfolio landlords with four or more properties spent an average of £17,000 on renovations, with repainting, new carpets, fitting new flooring, and new kitchens and bathrooms all popular among those surveyed.
Some landlords – 14 per cent – also undertook even bigger projects such as kitchen extensions, a loft conversion at 10 per cent or eight per cent building a home office in the garden in order to capitalise on current demand for more space for home-working and living.
John Eastgate (pictured), MD, property finance at Shawbrook Bank, said: “Ensuring that properties are up to a good standard and meet the current demands of tenants is a mark of a responsible landlord, however, it’s important that landlords are not putting themselves at risk financially in order to undertake this work. Unsecured short-term finance products like credit cards can come with high interest rates which could leave landlords with substantial debt.”
He added: “There are other finance options available to landlords which can often be less well-known but a suitable alternative to short-term credit or using personal savings, for example, a second charge mortgage can be a good option for landlords looking to refurbish. We’d encourage any landlord considering a renovation to speak to their broker about their options before putting it on a credit card.”
He added: “Renovating your properties can help attract more tenants, secure higher rents and boost the value of the property, but don’t do so at the expense of your own financial security.”