Landlords spend almost £1bn on upgrades annually
- Published: Tuesday 01 June, 2021
- By: Commercial Trust
UK lender Paragon has released new data which shows landlords spend an estimated £839 million a year upgrading properties.
These upgrades are on newly purchased properties before they are let to tenants.
The lender surveyed over 900 landlords, and 77% of them reported investing in upgrades to properties following a purchase.
The average price of these upgrades? £8,720 each.
When looking at the average number of buy to let properties brought each year since 2015, this means a total of around £839 million is invested in upgrading the PRS annually.
The most common work undertaken was “general painting and maintenance” at 67%.
This was then followed by “electric or plumbing work” at 44% and laying “new floor” at 37%.
More expensive renovations, such as a new “kitchen or bathroom” installation were at 32% and “new boiler or replacing windows” at 23%.
Richard Rowntree, Paragon Bank Mortgages managing director of Mortgages, said:
“Landlords typically will make significant improvements to a property before letting to tenants, helping to improve standards across the private rented sector. Landlords will of course benefit from this investment through capital appreciation, but it always results in better quality homes for tenants.
“There is a clear correlation between buy-to-let investment and improving standards in the quality of private rental homes. Standards of property in the PRS have increased significantly over that period. Overall homes in the sector are newer, larger, warmer and more energy efficient than they were 10 years ago and tenants have more choice.
“Whilst we recognise more needs to be done to improve standards, since 2009 there are nearly three times the number of properties with an energy rating of C or above, a 100% increase in the number of homes built after 1990 and a substantial expansion in the types of property available to rent in the PRS.”
Another section of the Paragon report highlights that the standard of property in the PRS has improved in the last 15 years.
Since 2006, the number of homes that were classed as ‘decent’ under government standards has increased from 53.2% to 76.7%.
This means that over 3.6 million homes are classified as decent, compared to the 1.4 million in 2006.
Energy performance has also seen dramatic improvement in the sector, with a 272% increase in PRS homes with an EPC rating of C or above since 2009.
All new survey shows that landlords are investing heavily in the properties they are buying.
It is a long term investment to make sure that a tenant is happy and warm whilst energy-efficient housing can save money on utilities and unlock certain ‘green mortgage’ options.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.