Landlords are investing in doing up their existing properties, rather than taking on the extra transaction costs of expanding their portfolios, according to a new report from Countrywide.
The property agent’s Lettings Index for March shows a record number of landlords remortgaging to release funds for home improvements, rather than to sell up.
In the past 12 months, out of the 171,421 landlords who remortgaged their buy-to-let properties, 9,523 did so to take money out to spend on doing up their investments. This is up from 8,459 in 2017 and three times more than in 2016.
Meanwhile, the index found that the average new rent hit £951 per month in March – up by 1.7% on the same month last year.
The Midlands recorded the fastest rent price growth, of 2.8% on an annual basis, taking the average value to £668 per month. Average rents in Scotland dropped for the second consecutive month, but the rate of decline slowed in March, to 1.5%, leaving the typical price at £615.
Johnny Morris, the Research Director at Countrywide, comments on the report: “A record number of landlords are remortgaging to release money to spend on their properties instead of trading up.
“The additional transaction costs incurred from the Stamp Duty changes for second home owners means more landlords are choosing to invest in their properties, refurbishing and improving them and holding on to them for longer to maximise gains.”
He continues: “Average rents grew in seven out of eight regions across 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.”
Landlords, are you more concerned with doing up your rental properties, rather than investing in further buy-to-lets?