Two out of ten landlords use a credit card or other short-term debt to refurbish their properties, according to Shawbrook Bank.

The lender found 19% of buy-to-let owners financed repairs by this method over the last year in its Changing Face of Buy to Let report.

Overall, 62% of landlords undertook a refurbishment to a rental property in the last 12 months, often using gaps in tenancies caused by the pandemic to affect repairs.

It found that 18% of landlords renovated more than one property.

Landlords also used their own finances to pay for building work, with 60% using personal savings or investments, and 12% using a recent inheritance or windfall. A further 12% used a second charge mortgage.

BTL owners spent £13,000 on average on renovations over the last year, with portfolio landlords – those with four or more properties within their portfolios – racking up £17,000 bill.

The most popular refurbishments were repainting, undertaken by 37% of landlords, fitting new carpets or flooring, 28%, putting in a new kitchen, 27%, or bathroom, 27%.

However, some landlords financed bigger projects such as kitchen extensions, 14%, a loft conversion, 10%, or building a home office in the garden, 8%, to capitalise on current demand for more space for home-working and living sparked by the health crisis.

Shawbrook Bank managing director, property finance John Eastgate says: “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.

“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.

“Renovating your properties can help attract more tenants, secure higher rents and boost the value of the property, but don’t do so at the expense of your own financial security.”

Shawbrook Bank commissioned data group Opinium to survey 1,000 landlords, including 150 portfolio landlords, and 1,000 private tenants between 26 May and 3 June.