Savings and lending bank Shawbrook recently conducted a Changing Face Buy-to-Let Report to investigate refurbishment costs.
In total 1,000 landlords, and 1,000 private tenants were surveyed on their property portfolio, rental situation and viewpoints. 150 portfolio landlords, those with four or more properties within their portfolios, formed part of the landlords who participated in the research.
The Changing Face of Buy to Let report discovered that in the last 12 months nearly two-thirds of landlords (62%) decided to revamp one of their rental properties over the past year. While more than one rental property has been renovated by 18% of landlords.
Landlord renovation costs
According to new research by Shawbrook Bank two in ten landlords funded their refurbishment using a short-term finance product or their credit card.
Overall, the research shows 60% of landlords also used their own finances to pay for renovations and 12% paid using a recent inheritance or windfall. A second charge mortgage was used by 12% of landlords to refurbish their rental properties.
On average £13,000 was spent on renovation projects over the past 12 months. The research also analysed the type of work landlords got done in their homes. Repainting was the most popular renovation task as 37% got this done. A new kitchen was installed by 27%, new carpets or new flooring was installed by 28% and a new bathroom was installed by 27%.
Renovation tasks that are more costly and time-consuming were conducted across various properties. Kitchen extensions were carried out in 14% of the landlords' properties, 10% of landlords got a loft conversion and 8% got a home office built in their garden.
John Eastgate, managing director of property finance at Shawbrook Bank further explains: “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."
“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."
“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.”