Landlords rethink property renovations as data reveals mixed returns

Of the landlords who have poured money into refurbishing their rental portfolios over the past few years, many say they regret making the investment, research reveals.

According to Nationwide, the rush to upgrade kitchens, bathrooms and energy efficiency features has delivered uneven outcomes, but some projects have boosted yields.

It says that nearly nine in 10 landlords have refurbished at least one property during the past five years, and kitchens and bathrooms dominated, with around one in five upgraded.

The trend mirrors similar patterns among owner occupiers, although the motivations differ sharply, with landlords more focused on compliance and tenant appeal than personal comfort.

Landlords carry out refurbishment

Nationwide’s senior economist, Andrew Harvey, said: “Nearly nine in 10 (88%) landlords have undertaken renovations on at least one of their rental properties over the past five years.

“Kitchen and bathroom improvements were the most popular, with one in five renovated properties receiving these upgrades over the past five years.”

He added: “Landlords cited a variety of reasons for renovating, but the most popular were to attract new tenants and reduce vacancy period and to boost the value of the property.

“24% of landlords said their property/properties needed it due to general wear and tear.

“Meanwhile, 23% wanted to ensure they had a good reputation as a landlord by showing care for property and tenants.”

Regret carrying out the work

Surprisingly, more than half of landlords said they regretted taking on renovation work.

The disruption topped frustrations, with many losing income while tenants moved out.

A large proportion said the finished result did not meet expectations, either because costs were higher than estimates or rental income failed to cover the investment.

For some landlords, the financial hit outweighed any uplift in their property’s value.

EPC improvements popular

Energy improvements proved popular and almost a fifth of renovated rentals received green upgrades, from solar panels to insulation.

Many of these choices were tied to meeting minimum energy efficiency standards, which now set a floor of EPC band E for most lets.

A broader shift across England is also evident, with solar panels becoming more common and millions of homes now equipped with electric vehicle charging.

More ambitious alterations have seen multi storey extensions in 17% of upgraded rented homes, while basement conversions cropped up in 15%.

A large share of landlords also used refurbishment work to convert properties into Houses in Multiple Occupation, signalling the continued search for stronger yields.

How much landlords spend

The average spend has seen landlords splashing out around £88,000 over five years, although the mix varied widely.

When divided by the number of properties refurbished, the typical figure stood at roughly £43,000.

Many landlords say the expense was worthwhile as they fought to attract new tenants, cut void periods or simply replace worn out fixtures.

Most who renovated went on to raise rents with more than 80% increasing rents with an average rise of 17%, with nearly a third putting rents up 20%.

Difficult balance for landlords

Mary-Lou Press, the president of NAEA Propertymark, said: “Nationwide’s latest report reveals the difficult balance landlords face between maintaining high-quality homes and navigating the rising costs and complexity of renovation.

“Improvements that increase space or enhance energy performance continue to add the greatest value, and these findings should reassure tenants that many landlords are investing for personal reasons, but also to strengthen the quality of homes and improve minimum energy efficiency standards.”

She added: “However, the fact that over half of landlords regret undertaking renovation works underlines the financial pressures they are facing.

“Excessive taxes, regulatory uncertainty, and the loss of income during void periods all contribute to a challenging environment, particularly at a time of higher interest rates and affordability constraints for tenants.”

Property118 commercial reality check

Renovation regret usually comes from loose scoping rather than poor intent. Costs spike, timelines slip and rental uplift lags when projects are not treated like commercial investments. Professionals who take control of budgeting, sequencing and contractor management tend to convert upgrades into measurable returns.

What serious landlords should do next

Run a full refurbishment audit: Review recent works, actual costs, rental uplift and void impact. Treat it as a portfolio learning exercise so future projects follow tighter assumptions and clearer margins.

Model project ROI before committing: Use two versions of the numbers: a realistic base case and a stress case with 15 to 20 per cent cost inflation. This protects cash flow and prevents regret driven by over-optimism.

Specify works with commercial precision: Define scope, timelines and deliverables in writing. Contractors respect clarity, and it reduces disputes, rework and budget drift.

Link improvements directly to yield strategy: Upgrades without a rental or occupancy plan rarely pay for themselves. Match works to target tenant segments and quantify expected value.

Plan energy upgrades as staged capital investment: EPC improvements work best when scheduled over multi-year cycles, coordinated with refinancing windows and assessed against long-term compliance risk.

Convert disruption into opportunity: If a unit is empty during works, use that period for deeper structural checks, documentation updates and forward planning rather than letting the void simply erode income.