Record number of landlords re-mortgaging for home improvements

  • 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 in 2016 (2,967)
  • 6% of landlords who re-mortgaged in the last 12 months released cash to spend on their property, up from 1.9% in 2016
  • The average cost of a new let reached £951 pcm in Great Britain in March 2018, 1.7% up on the same period last year

 

The number of landlords re-mortgaging to release money for home improvements has reached a record high.  In the last 12 months, out of the 171,421 landlords who re-mortgaged their buy-to-let property, 9,523 did so to take money out to spend on their investment.  This is up from 8,459 in 2017 and three times more than in 2016 (2,967).  In the last 12 months 5.6% of landlords who re-mortgaged released cash to spend on their property, up from 1.9% in 2016.  (Table 1)

 

The greatest increase was in the East of England where, in the last 12 months, one in ten landlords (10.4%) who re-mortgaged 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 re-mortgaging released money for home improvements, up 4.4% in the last two years.  (Table 2)

 

Landlords in London took out the most money to spend on buy-to-let improvements, £35,470 on average.  This is over three times the amount an average landlord in Yorkshire & the Humber withdrew (£11,150).  Across Great Britain as a whole, the average landlord re-mortgaging to make improvements took out £22,850.  (Table 3)

 

The average cost of a new let reached £951 pcm in Great Britain in March 2018, 1.7% up on the same period last year.  The Midlands saw the fastest rental growth, up 2.8% year-on-year, followed by Wales (2.1%) and Greater London (2.1%). (Table 4)  Average rents in Scotland fell for the second month in a row, but the rate of decline slowed in March.

 

Commenting 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.”

 

Table 1 – Landlords re-mortgaging to raise money for home improvements

Year Total number of buy-to-let re-mortgaging Number of landlords re-mortgaging to raise money for home improvements % of landlords re-mortgaging 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

 

Table 2 – Proportion of landlords re-mortgaging for home improvements by region

Region % of landlords re-mortgaging 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

 

Table 3 – Average amount withdrawn by a re-mortgaging 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

 

Table 4 – 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