Landlords look for ‘doer-uppers’ when investing in property and typically spend approximately £8,500 a year on improvements across their portfolios, according to our latest research at Paragon Bank.
We surveyed more than 500 landlords and found that when investing in property, 44% target homes that require some form of improvement, while a quarter are more likely to purchase properties that are ready to rent. Just under a third, 32%, said that they have no preference between the two investment strategies.
The research, which was part of our wider Improving standards and sustainability in PRS properties report, also revealed that in addition to general maintenance, annual investment in property improvements averages approximately £8,500 across a portfolio.
Investment varies with portfolio size
Unsurprisingly, investment varies amongst landlords but as is to be expected, tends to increase with portfolio size. Those with between one and three properties spend £3,500 a year on average, increasing to £8,100 amongst landlords with between four and 10. Average annual investment of approximately £11,800 is made by landlords with eleven or more rental homes across their portfolio.
The findings of our research align with official Government data showing how the last 15 years have seen the proportion of PRS properties classed as ‘non decent’ fall from 41% to 21%. Of course, there’s still work to do to ensure that all tenants live in safe, comfortable homes, so it’s great to see many landlords are already actively improving their portfolios, especially as this a key facet of the Renter’s Rights Bill.
Internal renovation is most popular
Like investment levels, the types of improvements chosen by landlords varies but the data reveals a propensity for internal renovation. Around six in 10 landlords – 65% and 62% respectively – enhance the look and feel of homes with new bathrooms or new kitchens.
Three-quarters, 76%, of landlords have installed new boilers, but heat pumps are less prevalent, with just 3% opting for them.
New windows top external improvements
Common external enhancements made in recent times include installing new windows, undertaken by half of landlords taking part in our research, while one in four, 39%, have replaced a roof or external doors. Over a quarter of landlords, 27%, have landscaped a garden and 6% have extended a property.
Alongside changes to enhance properties, landlords have also improved the safety of their rental homes, with just over half, 54%, remedying damp issues and 22% addressing any structural issues. With upcoming changes in legislation around Awaab’s Law landlords will have increased obligations around rectifying hazards such as damp and mould in rental homes in a timely fashion so improving the living conditions of properties will continue to be vital.
