Surprisingly Useful:
Blog
Vendor Advice

A new buy-to-let refurbishment mortgage and the benefits of renovate to rent

October 14, 2019

Landlords have seen numerous changes in the past couple of years, involving the stamp duty surcharge, less tax relief, and stricter stress-testing from lenders. As a result, landlords need to find ways to adapt to the tough market conditions. Refurbishing properties before letting them out, also known as ‘renovate to rent’, can help buy-to-let landlords add value and maximise rental yields and profits. Landlords can then benefit from growth in property prices while rent from tenants help pay the mortgage.

This strategy of doing up buy-to-let properties to increase profits has recently been reiterated with a great case study on This Is Money. One investor started buying doer-uppers for low prices and completely refurbishing the properties before renting them out. She has now amassed a property portfolio of seven properties worth nearly £1.5 million.

Since it’s become more difficult to make higher yields and property prices have increased, more and more landlords are deciding to invest in renovation projects to renovate to rent. Read on to find out about the new buy-to-let refurbishment mortgage with Portico Finance, as well as the benefits of renovating rental properties.

Refurbishment buy-to-let mortgages

Landlords often want to add value to a home, but mortgage lenders typically only value a property based on its current state, not what it will be worth after refurbishment. This means value and rental income figures are hit, possibly making the purchase financially unviable. Financing for refurbishment projects has previously been more difficult to obtain; however, a new buy-to-let mortgage with Portico Finance makes that much easier.

The buy-to-let refurbishment mortgage offers landlords an opportunity to buy a property needing light and general works. Once the refurbishments are finished, they can refinance on a valuation agreed at the outset. With this refurbishment mortgage, landlords have a six-month window to complete the works. There will be no hassle with surveyors afterwards concerning subsequent changes in the market or disapproval with the finished project – problems many buy-to-let landlords who have taken on refurbishment projects have experienced.

The original survey will reveal the valuation of the property’s future worth and rental income once the renovations are completed. After a re-inspection, the lender then allows landlords to leverage back the money they’ve spent for the works on the new mortgage, offering a way to finance the project.

Refurbishing buy-to-let properties have many benefits, and this mortgage makes it easier for landlords to undertake these projects. Now we’ll go through the advantages of refurbishing buy-to-let properties or ‘renovate to rent’.

portico finance refurb mortgage

Improving rentability

The “improve, don’t move” trend, where homeowners decide to remain in a property and carry out home improvements instead of moving, has increased five-fold among homeowners. And it’s becoming a trend with buy-to-let landlords as well.

Making improvements to a property can naturally improve a property’s rentability, but it’s important to figure out what target renters want and improve a property based on their priorities, as The Telegraph points out. We actually surveyed 1,000 renters to find out what property interiors they find most appealing. You see can the results here. You can also read our guide on how to present your property according to tenant type.

If your property is a student house or a large family house, you would likely undertake different works to improve each property’s rentability to attract your target renters. Any improvement work should still be in proportion with the value of the property to make it worth the time and investment.

Related: Furnished or Unfurnished? Strategies for Presenting Rental Properties

portico finance

Adding value to a property

Undertaking refurbishments can also add value to a property. The quickest way to add value is by completing a loft extension for extra bedroom space. Rear and side extensions can also be an effective way to increase the number of bedrooms, while also increasing the value of the property itself. These renovations add extra usable space to a property, making it more valuable.

Increasing rental income and yields

As property prices have risen over the years, it has become more difficult for landlords to make high yielding returns. Buying properties and undertaking swift but radical refurbishments, usually including adding more rooms, and then renting the properties out allows landlords to increase their profits.

The right improvements to a property can boost capital value along with rent, maximising returns. An additional benefit of improving a property is that capital expenditure can be offset against capital gains tax. Refurbishing properties also lowers long-term maintenance costs and attracts higher quality tenants who are more likely to stay put for longer – which is one of our goals at Portico.

As more landlords are rebalancing their portfolios to maximise yields, the savviest landlords have found ways to adapt. A recent Financial Reporter article which we agree with, reveals refurbishing properties is an effective way to make buy-to-let work in today’s market, add capital value, and improve yields and rental income.

A long-term investment

Many view buy-to-let as a long-term business investment. The right investment in the right property is likely to pay off for years to come, and appropriate renovations can help landlords improve rentability, add value, and increase profits. This could be a type of project we see more buy-to-let landlords take on in order to adapt to the changing market.

As there’s a new refurbishment buy-to-let mortgage available to landlords through Portico Finance, this makes it easier to undertake refurbishments on buy-to-let properties and renovate to rent. If you’d like to discuss this mortgage or any of buy-to-let mortgage, give Paul Tait and the team an email at finance@portico.com or a call on 020 7731 9680 !!!!!. Paul has recently answered some FAQs, which you can find here.


Find out if you’re charging the correct rent, or discover the current value of your rental property with our online instant valuation tool portico.com/valuation


We already know how much your rental property is worth. Type your postcode to find out and get an online valuation within 60 seconds.

Get an Instant Valuation

Special offers from independent local businesses

Find Out More
More Portico Places

Cook Fulham (Fulham)
Free takeaway for two from Cook in Fulham with your Portico card


Hard Rock Cafe (Bloomsbury)
15% discount on food, non-alcoholic beverages and retail


SE22 Piano School (Dulwich)
50% off your first lesson (T&Cs apply)

Before you go
Before you go...

Would you like an instant property valuation?

No thanks Yes please