A major reason for improving buy to let properties is to improve energy efficiency and to make tenants safer. Energy efficiency improvements include better insulation, replacing old boilers with ones that use less energy and installing smart meters to enable tenants to monitor energy usage.
AXA reports that 70% of private residential property is now rated on bands A to C for energy performance. Legislation which came into force in April 2018 made it compulsory for property to be rated at least F for new leases. The report from AXA shows that landlords are voluntarily exceeding this rating.
Other improvements are done for safety reasons, including installing smoke alarms and providing fire exits. Much of this work is to comply with regulations specially to conform to new licensing conditions from local authorities and the government that cover houses of multiple occupancy.
The managing director of AXA insurance, Gareth Howell said:
“Landlords are getting more professional, and we are seeing standards rise in British rentals, driven by legislation and desire of landlords themselves. We know that many start out as ‘accidentals’, and there is a big learning curve for them at the start, particularly as legislation changes so often.”
To fund improvements landlords can use bridging loans or if they have enough equity in the property they can remortgage their commercial mortgage to release funds for improvement work.