Should you renovate before letting this Spring?

Then again, how deep into your pockets do you reach when building costs are looking hefty this year?

Whether you’re thinking about a little sprucing or else modernising a whole house, here are some factors to consider when weighing up the renovation costs versus benefits.

The current state of your property

New legal requirements

Most likely, you’ll make sure your property is of high quality anyway. But the Renters’ Rights Act (RRA) formalises a landlord’s responsibility to provide a good place to live and applies the Decent Homes Standard (DHS) to England’s private rented market for the first time. This adds the requirement that a home meets the Energy Performance Certificate rating of C, meaning it has efficient, programmable heating and effective insulation.

While the new DHS won’t come into effect until 2035, other aspects of the RRA are set for the beginning of May this year. We advise landlords to familiarise themselves with all the new rules to avoid receiving financial penalties from their local council, who will soon have greater powers, and generally feel confident they know how the system works.

Here’s the government’s guide to the Renters’ Rights Act.

Your own judgement and plans

Aside from government legislation, maybe you want to make your property more appealing? Replace a dingy kitchen with an open-plan cooking and dining space? Add an ensuite to the master bedroom? Upgrading a property can bring you plenty of benefits – for example you can:

• Potentially charge more rent: just be aware of the new rules around rent increases.
• Avoid the cost – and inconvenience – of doing work in the future: once tenants have moved in, you can remove the builder’s number from your favourite contacts list!
• Attract the type of renters you’d like: such as young professionals or retired couples.

Let’s look at this third benefit in more detail.

The tenants you want to attract

How about opening up the garden to impress people with kids? Or turning a garage into a home office for young professionals? Talk to a local letting agent for advice on who to attract and let this guide your decisions for renovations. For instance, if a university down the road lacks decent student accommodation, you might make your house more durable – instead of luxurious – with hard-wearing fixtures and fittings for this market.

Whatever type of tenant you’ve got in mind, it’s wise to focus on making the property clean and functional rather than spending money on features your next tenants won’t necessarily like or look after. The kitchen and bathrooms are often the best places to start. Statistics from Hillarys found that Google searches for ‘kitchen renovation’ and ‘bathroom renovation’ were among the most popular home-improvement trends last year.

Your budget

Building materials have gone up by 37% since 2010, owing to supply chain disruptions and geopolitical conflicts, among other factors. Then there’s a shortage of skilled tradespeople.

Try to be meticulous in your planning and break any large projects into stages to analyse the costs. If you’re worried about your budget, you could consider smaller-scale projects like refreshing the paint work, updating light fixtures, and tending to the garden.

Final thoughts

Although it’s exciting to improve a property, don’t rush in. Ask an experienced letting agent for their thoughts and insider knowledge on the area’s market ; there may be things you haven’t considered, such as changes in demand and upcoming building along the street. The more you research, the better the chance you can renovate your property for maximum impact and financial reward.