A new analysis of landlord renovation behaviour has revealed a sharp divide between improvements that meaningfully boost rental yields – and those that cost thousands but barely move the dial. The findings matter now more than ever, as mortgage rates, compliance pressures, and tenant expectations continue to shape profitability across the UK rental sector.
Nearly nine in ten landlords (88%) have upgraded at least one rental property in the last five years, according to the report. However, more than half later regretted the decision, largely due to unexpected cost, void periods, and disappointing returns.
Landlord renovation trends
Kitchen and bathroom refurbishments were the most common projects, with around 20% of renovated rental homes receiving upgrades. These remain “tenant-visible” improvements that help secure stronger demand in competitive city centre markets.
Green upgrades are also increasing – 18% of landlords completed energy-efficiency improvements. Of those, 37% installed solar panels, 33% upgraded boiler or pipe insulation, and 32% added EV charging points. With MEES requirements already forcing rental stock to achieve an EPC E or above, energy-focused work is becoming less optional and more regulatory-driven.
Larger projects were also common: 17% added multi-storey extensions, and 15% carried out basement conversions, often to support HMO licensing and higher occupancy yields. In fact, 68% of major works were linked to converting a property into HMO use.
According to Nationwide’s Senior Economist Andrew Harvey, landlords were motivated by multiple pressures:
“The most popular reasons for renovating were attracting new tenants, boosting property value, and reducing void periods.”
However, he noted that 51% of landlords regretted renovating, mainly due to lost rental income while properties stood empty during works. That finding contrasts sharply with owner-occupiers, where only 4% expressed regret.
Where landlords see the strongest value uplift
While cosmetic upgrades help lettings, the most financially powerful changes remain structural.
Data suggests:
- A second bathroom adds around 8% to property value – double the benefit owners see.
- Adding a double bedroom increases a two-bed property’s value by roughly 13%.
- A loft conversion including a bedroom and bathroom can increase market value by up to 24% on a typical three-bed home.
On the rental side:
- An added bedroom can raise rent by around 12%, roughly £125 per month.
- A second bathroom attracts a 6% rental premium (around £60 a month).
- A conversion adding extra floor space can boost rent by 26%, which equates to roughly £285 per month.
Energy ratings also remain financially linked: properties with A or B EPC ratings attract a 10.9% premium compared with similar stock rated D.
For many landlords, the upgrade maths is simple: scale and space outperform fixtures and décor when it comes to long-term financial return.
Rent growth outlook and landlord considerations
The average spend among landlords completing renovations was £88,000 across portfolios, or roughly £43,000 per property. Nearly a third increased rents by 20% or more after work was completed, with over 80% implementing some form of rent rise.
Yet regret persists. The most frequent complaint? Being forced to evict or wait out tenancies before beginning works – a reality smaller, mortgaged landlords often struggle with.
Letting agents report mixed sentiment. One Manchester agent told media last month that landlords upgrading to HMOs were “leading the profitability curve”, while standard single-let modernisations “rarely generate fast payback unless rents rise aggressively.”
Specialist finance for landlords
With lenders increasingly favouring EPC-rated stock and future-proofed layouts, specialist buy-to-let and refurbishment finance continues to grow. UK Finance data last quarter showed a rising trend toward staged lending, mezzanine development, and bridging, particularly in university cities and commuter belts.
Whether that continues depends partly on policy stability – something landlords haven’t enjoyed for much of the past decade.
Editor’s view
Renovating a rental property isn’t just a design choice – it’s a strategy. Landlords who focus on extra space, additional bathrooms, and improved EPC ratings are seeing the most meaningful return, both in rent and long-term valuation. Meanwhile, those investing in purely cosmetic upgrades without a rental pricing plan often feel the sting later.
The question now is simple: with compliance tightening and tenants demanding smarter, greener homes, will more landlords treat refurbishment as optional – or essential?
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance.
Published: 14 November 2025
Sources: Halifax research, ONS EPC data, UK Finance refurbishment lending reports.
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