One in five landlords have used a credit card or other short-term finance product in order to fund a recent refurbishment, new research by Shawbrook Bank has revealed.

The findings indicated that 62% of landlords have undertaken a refurbishment to one of their rental properties in the last 12 months, with 18% renovating more than one rental property.

Shawbrook surveyed a total 1,000 landlords, including 150 portfolio landlords, as part of its research and found the majority had used their own finances to pay for renovations to their rental properties. Around 60% had utilised their personal savings or investments, while 12% had used a recent inheritance or windfall. A further 12% used a second charge mortgage in order to finance the changes they wished to make to their rental properties.

Overall, landlords have spent an average £13,000 on renovation projects over the last year, with portfolio landlords – those with four or more properties within their portfolios – spending £17,000.

“Ensuring that properties are up to a good standard and meet the current demands of tenants is a mark of a responsible landlord, however, it’s important that landlords are not putting themselves at risk financially in order to undertake this work,” commented Shawbrook Bank’s MD property finance, John Eastgate.

“Unsecured short-term finance products like credit cards can come with high interest rates which could leave landlords with substantial debt.

“There are other finance options available to landlords which can often be less well-known but a suitable alternative to short-term credit or using personal savings. For example, a second charge mortgage can be a good option for landlords looking to refurbish. We’d encourage any landlord considering a renovation to speak to their broker about their options before putting it on a credit card.”

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