Results revealed for InterBay’s buy-to-let refurbishments report
By |Published On: 1st October 2019|

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Results revealed for InterBay’s buy-to-let refurbishments report

By |Published On: 1st October 2019|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

Mortgage lender InterBay Commercial’s report reveals refurbishments made by landlords have resulted in drastic improvements to the quality of private rental sector (PRS)

The report, entitled Unlocked value: The role of refurbishment in buy to let, shows:

  • The proportion of homes in the PRS in England deemed non-decent by the Office for National Statistics (ONS) has fallen for ten consecutive years, decreasing to 24.5% from 44% in 2008.
  • The number of non-decent homes has fallen in absolute terms, down by 275,000, despite the sector growing by 45% over the period, adding 1.5m homes.
  • It is highlighted that the latest English Housing Survey shows that 84% of private renters were satisfied with their current accommodation.
  • A survey of over 700 property investors shows 70% of landlords who recently undertook a refurbishment did so to improve the property.
  • The same survey revealed 45% made improvements to increase a property’s capital or yield.
  • The analysis shows that landlords typically spent £12,000 per refurbishment, depending on the type of refurbishment.
  • Heavy work, such as a conversion or extension, stood at an average of £40,000.
  • Light work, such as modernisation or redecoration, came to an average of £7,000.
  • Overall, 28% of landlords spent less than £5,000 on their last refurbishment and 43% spent less than £10,000. Only 13% spent more than £100,000.
  • 82% of those who undertook such work saw monthly rent rises as a result. The average rent for a refurbished property rose by £81 per month, up by 8%.

Darrell Walker, Head of Sales, InterBay Commercial commented: “It may be an easy target for political point-scoring, but the PRS has been a success story since the financial crisis, catering for a growing proportion of the population that either cannot or chooses not to purchase a home. As the PRS has grown, it has also professionalised. As it has done so, the standard of accommodation for tenants has improved drastically too.

“Refurbishment has been central to this improvement. It is a win-win for tenants and landlords. Tenants see better quality accommodation, while landlords improve the rent they receive and maximise the value of the property. And with interest rates still bumping along the bottom, those borrowing to support refurbishment can access historically cheap funding to enable improvement works.

“Nonetheless, continued investment in the sector is not a foregone conclusion, and it must be supported rather than undermined. Landlords have been buffeted by the headwinds of policy change since 2015, and costs have risen for investors. Should this rate of change continue, it will weigh on landlords’ decisions to spend more on their portfolios, and risks undermining a decade of progress.“ 

About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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