Landlords are remortgaging their buy-to-let properties in record numbers in order to make home improvements. According to figures by lettings network, Countrywide, which used its own data, 9,523 landlords who remortgaged their properties used the money for home improvements in the past 12 months. On average, they withdrew £22,850. This is the highest figure that Countrywide has in its records, which go back 12 years, and it’s more than three times higher than in 2016, when only 2,967 remortgaged for revamps. Landlords with properties in the East of England were the most likely to use the money for home improvements. One in 10 landlords who remortgaged said it was for home improvements. London landlords were the biggest spenders and they took out an average of £35,470 to improve their buy-to-lets.

Countrywide research director, Johnny Morris, said that recent tax changes and stamp duty imposed on second properties meant more landlords were choosing to invest in existing properties. They were spending money on refurbishments and improvements while holding on to their investments for longer in order to maximise gains. He said that a record number of buy-to-let landlords were choosing to remortgage to release money to invest in existing properties rather than selling and trading up.

Overall though, buy-to-let lending has fallen considerably since new controls were brought in regarding mortgages and remortgages. According to the Bank of England, buy-to-let loans are now 12.7% of all mortgage lending, which is down from 21.4% in 2016. However, for many financial experts, this is being hailed as a good thing. John Eastgate, of Kent Reliance, said this fall can mainly be attributed to a drop in the number of amateur landlords. He said the rental market is now being supported by more professional landlords, which is a positive thing. He added that the rental market had been growing too quickly and was being driven by people who did not understand the risks involved. As professional landlords realise, this is a job and not a way of making money quickly. Mr Eastgate pointed out that professional landlords also borrow less and tend to opt for 50% loan-to-value deals, rather than 70% deals or even higher.

With fewer amateur or accidental landlords on the scene, the way is open for increased professionalism in the sector. This could explain why some lenders are offering better incentives for buy-to-let investors. As an example, a report says NatWest is increasing the permitted value of all loans from £2 million, up to £3.5 million. Other lenders are also relaxing the limit on how many properties can be held in a portfolio. As SPF Private Clients chief executive, Mark Harris, says, tax changes have hit the buy-to-let sector hard. This could have put off novice landlords from investing, which means fewer landlords overall. This means companies will need to be flexible and competitive as there are fewer landlords to sell to. So whilst professional landlords are being hit by tax changes overall, it is having the effect of knocking out the amateur element of the sector.

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