Landlords are increasingly seeking out properties in need of improvement, with an average annual spend of approximately £8,500 on portfolio upgrades, new research from Paragon Bank has revealed.

A survey of over 500 landlords, commissioned for Paragon’s Improving standards and sustainability in PRS properties report, found that 44% of respondents deliberately invest in homes that require renovation. By contrast, just 25% prefer properties that are ready to let immediately, while 32% said they have no strong preference.

The research highlights a clear trend toward active investment in property standards across the private rented sector. Although expenditure on improvements naturally increases with portfolio size, the report found that even landlords with smaller holdings are spending meaningful sums. Those with one to three properties typically invest £3,500 a year, while landlords with four to 10 homes spend £8,100 on average. The figure rises to £11,800 for those with portfolios of eleven or more properties.

Louisa Sedgwick, managing director of mortgages at Paragon Bank, said the findings aligned with official government figures charting a notable improvement in the condition of rented homes over the past decade and a half.

“The findings of our research align with official Government data showing how the last 15 years has seen the proportion of PRS properties classed as ‘non decent’ fall from 41% to 21%,” Sedgwick said.

“Of course, there’s still work to do to ensure that all tenants live in safe, comfortable homes, so it’s great to see many landlords are already actively improving their portfolios, especially as this a key facet of the Renter’s Rights Bill.”

The study suggests that landlords prioritise internal improvements, with 65% having installed new bathrooms and 62% opting for upgraded kitchens. Boiler replacements remain widespread, undertaken by 76% of respondents, though greener alternatives such as heat pumps remain rare, with only 3% reporting installation.

External improvements are also popular. Half of landlords have fitted new windows, while 39% have replaced roofs or external doors. Landscaping efforts have been made by 27%, and 6% have undertaken extensions.

Safety-related upgrades are a further area of focus. Over half of landlords (54%) reported addressing damp issues, while 22% said they had remedied structural concerns.

According to Sedgwick, the findings mirror Paragon’s experience on the lending side, particularly in the popularity of its refurb-to-let mortgage product.

“This research showing that landlords spend substantial sums to improve their properties is supported by our own lending and our popular refurb-to-let product was developed precisely for this purpose,” she said. “We often see borrowers take on extra funds when remortgaging and with the large number of mortgages set to mature this year, it’s a great time for brokers to discuss the options available to their landlord clients who might want to take the opportunity to invest in enhancing their portfolios.”