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Graham Awards


Why landlords shouldn’t use credit cards to pay for refurbs

Around 20 per cent of landlords surveyed by a bank used a credit card or short-term finance to fund a recent refurbishment.

The research found that close to two thirds of landlords have undertaken a refurbishment to one of their rental properties in the last 12 months, with 18 per cent renovating more than one.

Landlords also used their own finances to pay for renovations to their rental properties, with 60 per cent utilising personal savings or investments, and 12 per cent using a recent inheritance or windfall. 


A further 12 per cent used a second charge mortgage.

Overall landlords spent on average £13,000 on renovation projects over the last year, with portfolio landlords - with four or more properties in all - spending £17,000. 

Popular works including repainting (37 per cent), fitting new carpets or flooring (28 per cent), putting in a new kitchen or bathroom (27 per cent). 

However, some landlords also undertook bigger projects such as kitchen extensions (14 per cent), a loft conversion (10 per cent) or building a home office (eight per cent) to capitalise on demand for more space for home-working.

With more landlords experiencing a gap between tenancies, taking the opportunity to refurbish allowed them to improve the property without causing disruption. Some 14 per cent of landlords said they chose to renovate because they had an extended void. 


Shawbrook managing director John Eastgate says: “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.”

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    Using a credit card gives Section 75 protection against faulty goods or workmanship. It may also give loyalty points or cashback.

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    The Advanced Rent Option lets you take a years' worth of rent in advance (minus standard fees) - and it's not a loan - so doesn't affect credit score. Money could be used for refurbs etc. If you visit the Advanced Rent Option website and go to their online calculator; you'll see how much you would get as your lump sum.


    This sort of scheme is in the same league of high cost as credit card interest.

    I pay everything on credit card and settle everything on the statement promptly to avoid all interest but have s75 protection and an online list of all outgoings to charge against tax.

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    I use credit card now to try and keep track of spending, otherwise it was getting into such a muddle. Its ok for digital academic LL’s to keep track of everything with their computers that’s all they will be doing. When you are a hands on LL when are go to do all this stuff especially now, if you pay cash for some items and card for others we used have receipts but now half of them don’t give you a receipt it’s sent your computer probably never again to be found or known how it was paid or missed altogether, so card helps to keep track of everything at least you know you spend it.

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    I have a DDR in place that pays my credit card off in full every month, so it costs me nothing + I get the protection, only a fool pays interest on credit cards.


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