Landlords spend an estimated £839m each year upgrading newly purchased rental property before letting it out to tenants, helping to drive-up standards in the sector.
The figure comes from a Paragon Bank survey of approximately 900 landlords showing that nearly four in five invest in upgrading property after purchase, spending an average of £8,720 each.
Based on the average number of buy to let mortgages granted each year since 2015, this spend would equate to a £839m annual investment in upgrading private rental stock.
The most common work undertaken is general painting and maintenance (67 per cent), electric or plumbing work (44 per cent), and laying new flooring (37 per cent).
A third of landlords (32 per cent) install a new kitchen or bathroom, with nearly a quarter (24 per cent) installing a new boiler or upgrading windows (23 per cent).
Paragon’s new report - called Driving Standards in the Private Rented Sector - highlights how the standard of property in the sector has improved over the past 10 to 15 years.
Since 2006, the portion of homes in the sector classed as ‘decent’ under government standards has increased from 53.2 to 76.7 per cent.
Overall, 3.6m homes are now classed as decent, compared to 1.4m in 2006. Over that same period, 1.4m buy to let mortgages for house purchase have been approved.
Conversely, the number of homes classed as non-decent in the PRS has not reduced significantly, with 1.0m homes categorised as non-decent today compared to 1.21m in 2006.
This suggests that the growth in new properties coming into the PRS over that period is driving up standards for the sector overall and diluting the stubborn proportion that remains non-decent.
Richard Rowntree, Paragon Bank managing director of mortgages, says: “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 private rental sector have increased significantly over that period.”