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Landlord remortgaging activity for home improvements hits record high

The number of landlords remortgaging in order to raise funds to improve their properties has reached an all-time high, new figures show.

In the last 12 months, 9,523 landlords who re-mortgaged their buy-to-let withdrew money for home improvements – over three times more than the 2,967 recorded in 2016, according to Countrywide.

In the last 12 months, 5.6% of landlords who remortgaged released cash to spend on their property, up from 1.9% in 2016. 

Landlords remortgaging to raise money for home improvements

Year

Total number of buy-to-let remortgaging

Number of landlords remortgaging to raise money for home improvements

% of landlords remortgaging to raise money for home improvements

2006

          145,500

                             2,375

1.6%

2007

          155,720

                             2,019

1.3%

2008

          114,740

                             1,998

1.7%

2009

            32,850

                                427

1.3%

2010

            35,000

                                420

1.2%

2011

            52,600

                                504

1.0%

2012

            59,200

                                533

0.9%

2013

            76,300

                                687

0.9%

2014

            95,900

                                767

0.8%

2015

          132,300

                             1,455

1.1%

2016

          153,000

                             2,967

1.9%

2017

          152,100

                             8,459

5.6%

Last 12 months

          171,421

                             9,523

5.6%

Source: Countrywide & UK Finance

The greatest increase was in the East of England where, in the last 12 months, 10.4% of landlords who remortgaged released money to spend on home improvements, up 6.8% in the last two years. 

Every region across the UK has seen a rise, but regions in the South have seen the biggest growth in landlords releasing cash.

In London, 7.4% of landlords remortgaging released money for home improvements, up 4.4% in the last two years.  

Proportion of landlords remortgaging for home improvements by region

Region

% of landlords remortgaging to release cash for home improvements (last 12 months)

Two year change

(2015-2017)

East of England

10.4%

6.8%

South East England

8.1%

4.3%

North West England

8.0%

5.8%

London

7.4%

4.4%

Yorkshire and the Humber

6.8%

3.7%

North East England

6.5%

3.9%

Wales

6.1%

3.5%

Midlands

5.8%

3.9%

South West England

5.6%

2.9%

Scotland

4.0%

2.0%

Source: Countrywide 

Landlords in London took out the most money to spend on buy-to-let improvements, £35,470 on average. This is more than three times the £11,150 an average landlord in Yorkshire & the Humber withdrew.

Across Great Britain as a whole, the average landlord re-mortgaging to make improvements took out £22,850.

Average amount withdrawn by a remortgaging landlord for home improvements

Region

Average amount taken out for Home Improvements (last 12 months)

London

£  35,470

East of England

£  22,240

South East England

£  22,020

Midlands

£  21,400

South West England

£  21,080

Wales

£  19,420

North West England

£  16,930

North East England

£  12,960

Scotland

£  11,280

Yorkshire and the Humber

£  11,150

Great Britain

£  22,850

Source: Countrywide

The average cost of a new let reached £951 per calendar month (pcm) in Great Britain last month,  up 1.7% up on the corresponding period last year.

The Midlands saw the fastest rental growth, up 2.8% year-on-year, followed by Wales at +2.1% and Greater London, also at +2.1%.

Average rents in Scotland fell for the second month in a row, but the rate of decline slowed in March.

New Lets (pcm)

Mar-18

Mar-17

YoY

Greater London

£      1,675

 £      1,641

2.1%

South East

£      1,026

 £      1,017

0.8%

South West

£         779

 £         765

1.8%

East

£         936

 £         926

1.2%

Midlands

£         668

 £         650

2.8%

North

£         626

 £         620

0.9%

Scotland

£         615

 £         625

-1.5%

Wales

£         650

 £         636

2.1%

Great Britain

£         951

 £         935

1.7%

Source: Countrywide 

Johnny Morris, research director at Countrywide, said: “A record number of landlords are re-mortgaging to release money to spend on their properties instead of trading up. The additional transaction costs incurred from the stamp duty changes for second-homeowners means more landlords are choosing to invest in their properties, refurbishing and improving them and holding on to them for longer to maximise gains.

“Average rents grew in seven out of eight regions across Great Britain, with Scotland being the only region to see falls.  Rental growth during the first quarter of this year stands at 2.1%, 0.5% faster than the same period in 2017, as low stock levels continue to drive growth.”

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