How are landlords financing their buy-to-let property refurbishments?


Landlords need better education about the options open to them to finance refurbishment of their properties, according to InterBay Commercial after its research found one in eight landlords were unaware of the types of finance available to them for refurbishing their properties.

According to the survey, around a third of landlords (34%) have used their personal savings to fund projects, and 18% have used a credit card or an overdraft to fund refurbishment work. Similarly, 32% of landlords who have yet to refurbish a buy-to-let property are expecting to pay for the work on a credit card, and 31% with a personal loan.

The report found that landlords spend an average of £12,000 on improving the quality of their property, and heavier scale projects tended to cost on average £40,000 but could add an average of £96,000 to a property’s value. However, the majority of landlords tend to favour light refurbishments, most likely due to the financing implications of major works.

Refurbishments more feasible with finance

Among buy-to-let landlords that had used finance to fund refurbishments in the past, remortgaging was a popular option with 18% using a remortgage buy-to-let loan and a further 30% expecting to use this option in the future.

Although 30% of landlords using mortgage finance would opt for a lump sum from a lender at the start of a refurbishment project, the survey found that 31% of landlords would use mortgage finance if they could access smaller sums from a loan facility throughout the project to maintain their cash flow and reduce their risk exposure.

Darrell Walker, head of sales at InterBay Commercial, said: “Education is vital in order to ensure that landlords are no longer relying too heavily on their own personal funds to improve their properties.

“With better understanding of the options at their disposal, landlords can choose from a variety of options from remortgaging to a bridging loan—making a refurbishment much more feasible and likely. Indeed, plugging the knowledge gap will not only benefit the landlord, but also the end tenant too.”

Join BuyAssociation for free and we can put you in touch with our expert broker partners to help you plan how to finance your property refurbishment.

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How are landlords financing their buy-to-let property refurbishments?


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