Landlords have helped drive an improvement in standards in privately rented property, with four in five upgrading each rental home they purchase.

A study by Paragon Bank, a buy to let mortgage specialist, found that 81 per cent of landlords make improvements on every property they add to their portfolio.

The survey of over 500 landlords found 22 per cent of landlords spend over £25,000 on upgrading a new portfolio property, with 18 per cent spending between £10,000 and £20,000.

On average, landlords expect to see a 19.8 per cent increase in the property’s value after completing upgrade work, with a 16.5 per cent increase in expected rental income.

The research found that 40 per cent of landlords prefer to purchase property in need of refurbishment, with 21 per cent opting for properties that are ready for tenants to move into.

The private rented sector has experienced a significant improvement in the standard of homes over the past 15 years, correlating with the growth of buy to let finance.

In 2008, 44 per cent of homes in the sector were defined as non-decent according to the Government’s English Housing Survey. Today, that figure stands at 23 per cent.

The addition of good quality homes has diluted the presence of poorer stock; In 2008, 1.8m privately rented homes were classed as decent, rising to 3.3m in 2021 – an 83 per cent increase. 

There has also been a reduction in the number of properties classed as non-decent – falling from 1.4m to 990,000, a 29 per cent reduction.

Richard Rowntree, Paragon Bank Managing Director of Mortgages, says: “Landlords have helped improve standards across the private rented sector over the past 15 years and the upgrading of stock they purchase is central to that.

“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.”

Asked why landlords make improvements to property, 83 per cent of landlords said they did so to ensure they are providing a good quality home to tenants, with 82 per cent doing so to make the property more attractive to tenants. Two thirds upgrade property to improve rental income and 57 per cent look to increase the capital value. Meanwhile, nearly half upgrade property for energy efficiency reasons.