Monday, April 16, 2018
Date Issued: Friday 13 April 2018
Embargoed until 00.01 hrs Monday 16 April 2018
Countrywide plc Monthly Lettings Index – March 2018
Record number of landlords re-mortgaging for home improvements
Numbers triple since 2016
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
Source: Countrywide & UK Finance
Table 2 – Proportion of landlords re-mortgaging for home improvements by region
Table 3 – Average amount withdrawn by a re-mortgaging landlord for home improvements
Table 4 – New Lets (pcm)
The Countrywide Lettings Index for April 2018 will be released on Friday 11 May 2018, embargoed for 00.01 hours Monday 14 May 2018.
For further information please contact:
Head of Research PR, Countrywide
Tel: +44 (0) 776 96 77 825
Notes to Editors
About the Countrywide Lettings Index and new methodology
The Countrywide Lettings Index has been running since 2012 and we continually seek to improve its accuracy. From June 2017 the methodology was changed to reduce the impact of seasonality and volatility in the rental market.
While the index remains a mix adjusted series, rent and rental growth figures for each month are now based on a three month rolling average rather than lets agreed in the last month. The most expensive decile of homes let has been excluded to reduce volatility and the mix has been updated to include the most recently published government stock statistics.
The Countrywide Lettings Index uses data from Great Britain's largest letting agent to track changes to the cost of renting. The index is based on the 90,000 homes let and managed by Countrywide in each year, adjusting for their location and type. It is based on achieved rather than advertised rents and the published monthly rental figures are an average of the new lets and renewals of tenancies over a rolling three month period.
About Countrywide plc
Countrywide plc is the UK’s largest property services group. The company spans both the residential and commercial sectors. With the biggest residential estate agency and lettings network in the country, Countrywide operates across all price points and in 2017 exchanged on over 50,000 homes, representing £19 billion worth of property. As the largest single mortgage broker in the UK, Countrywide completed on over £15 billion of mortgages last year. In addition, the company manages over 90,000 properties.
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