Landlords focus on ‘doer-upper’ investment properties

Landlords are focusing on purchasing properties requiring renovation – and spend £8,500 on improvements, research reveals.

The study by Paragon Bank of more than 500 landlords found that 44% prefer to buy homes needing upgrades, while 25% opt for properties ready for immediate letting.

Meanwhile, 32% show no preference between the two approaches.

The findings, part of Paragon’s report on enhancing standards and sustainability in the PRS, reveal that landlords spend £8,500 annually per portfolio for enhancements beyond routine maintenance.

Landlords keen to invest

The bank’s managing director of mortgages, Louisa Sedgwick, said: “The findings of our research align with official government data showing how the last 15 years has 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 Renters’ Rights Bill.”

Paragon found that a landlord’s spending on improvements is related to portfolio size: those managing one to three properties invest approximately £3,500 annually.

Whereas landlords with four to 10 properties spend about £8,100.

For those landlords with 11 or more rental homes, the average annual outlay reaches nearly £11,800.

Install bathrooms or kitchens

Improvements predominantly involve internal refurbishments with 65% and 62% of landlords respectively installing new bathrooms or kitchens to refresh living spaces.

Also, 76% have fitted new boilers, though only 3% have chosen heat pumps for heating solutions.

Externally, 50% of landlords have updated windows, and 39% have replaced roofs or external doors.

Other external modifications include 27% who have revamped gardens and 6% who have extended their properties.

Safety enhancements are also prioritised, with 54% tackling damp problems and 22% resolving structural concerns.