Research by The Mortgage Works suggests that landlords who are able to extend their properties or convert a loft to incorporate an extra bedroom can expect to earn an extra 12% in rent or an average of £125 a month.

The study revealed that kitchen and bathroom refurbs were the most common choice for landlords who had upgraded their properties within the past five years, accounting for 20% of all renovations.

A further 18% of upgrades were to make the property more energy efficient, by adding solar panels, insulation or other measures.

However, 51% of landlords regretted renovating their rental properties.

The reasons they gave included loss of rental income during works, dissatisfaction with the quality or cost of the renovation and not gaining the boost to rental income they had anticipated.

TMW senior economist Andrew Harvey says: “Nearly nine in ten (88%) landlords have undertaken renovations on at least one of their rental properties over the past five years, according to our latest research.

“Across all landlords making renovations in the last five years, the average spend was around £88,000 in total, although there was significant variation, which reflects the mixture of work undertaken and portfolio size. 

“Taking account the number of properties renovated, this works out around £43,000 per property.”

National Association of Estate Agents Propertymark president Mary-Lou Press says: “Nationwide’s latest report reveals the difficult balance landlords face between maintaining high-quality homes and navigating the rising costs and complexity of renovation. 

“Improvements that increase space or enhance energy performance continue to add the greatest value, and these findings should reassure tenants that many landlords are investing for personal reasons, but also to strengthen the quality of homes and improve minimum energy efficiency standards.

“However, the fact that over half of landlords regret undertaking renovation works underlines the financial pressures they are facing.

“Excessive taxes, regulatory uncertainty, and the loss of income during void periods all contribute to a challenging environment, particularly at a time of higher interest rates and affordability constraints for tenants. 

“These pressures show why many landlords struggle to recover their costs, even when they are committed to doing the right thing.

“A clear, long-term direction on energy efficiency standards and a review of the taxes and regulations impacting investors would give landlords the confidence to continue improving the quality of homes, boosting supply and ensuring that safe, modern and energy-efficient properties remain accessible and affordable for tenants.”