Property investment has seen some major changes over the past few years, with additional challenges for landlords in the buy-to-let market.
However, although the landscape has changed, mainly due to changes to stamp duty and tax relief, there remain opportunities for investors to maximise their income, with property refurbishment one exciting option to unlock additional value in their chosen property.
According to a survey carried out by one insurance company, the five renovations which add the greatest value include garages, lofts, energy saving measures, single storey extensions, and outside décor.
For example, building a garage on a property valued at an average price of £207,308 will cost about £15,450, according to the insurance company’s calculations. However, the investment may lead to a 20% - or £41,462 increase - in the price of the home, meaning an estimated profit of £26,012.
Similarly, an investment of £10,720 in energy saving measures on the same house could mean an estimated 14% - or £29,023 - increase in its value, providing an estimated profit of £18,303, according to the research.
Even smaller refurbishment projects such as new flooring, improving the garden or painting and decorating the property could add thousands of pounds to the value of the house.
Landlords are required to meet certain standards set out by the government for private rented accommodation, so when purchasing a property in need of some repair, items like new boilers or rewiring could be essential. Other renovations such as new kitchens and bathrooms, even if not essential, may help to attract prospective tenants and ensure the best possible yield.
It’s up to lenders like Together to adapt and offer dedicated products to support the needs of these kinds of investors. To this end, we’ve launched a new short-term loan to support people carrying out residential refurbishments, which allows investors and portfolio landlords to release equity once they have completed renovations on a property before selling it or renting it out.
This is one example of our common sense approach to lending and we are committed to creating more innovative products in the future that deliver exactly what our borrowers’ need.