The quality of properties in the private rented sector (PRS) has improved over the past decade as landlords spend more on refurbishment according to a report by InterBay Commercial.
The report, entitled ‘Unlocking Value: The role of refurbishment in buy-to-let’, highlighted that the proportion of homes in the PRS in England deemed non-decent by the ONS has fallen to 24.5% from a high of 44% reported in 2008.
Despite the sector growing by 45% in the past 10 years adding an additional 1.5 million properties, the number of non-decent homes has fallen by 275,000.
Darrell Walker, head of sales at InterBay Commercial, said: “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.”
This comes as the English Housing Survey shows that a majority (84%) of private renters were satisfied with their current accommodation.
The research conducted for InterBay found that 70% of landlords who recently undertook a refurbishment did so to improve the property, whilst 45% of landlords cited increasing a property’s capital or yield as their reasons to refurbish.
The analysis shows landlords typically spend £12,000 per refurbishment.
Further to this, 74% of those who undertook a refurbishment said it enhanced the property’s value, whilst 82% saw monthly rents rise.
Walker added: “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.
“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.“