A revealing new report has revealed that landlords are looking to improve the profitability of their current portfolios, as opposed to investing in more homes.
Results from interviews by Paragon Mortgages with over 200 landlords found that the Government’s policies for the sector are having a detrimental effect.
Following the announcement of alterations to mortgage interest tax relief, additional stamp duty and the wear and tear allowance, the first quarter of 2016 has seen a decline in purchasing potential amongst residential landlords.
Just 9% of respondents to the survey said that they were pressing ahead with plans to invite in the next three months. This was down from 14% in the previous quarter.
In better news, 76% of respondents said they now understand what implications the changes will have on their investment. 67% of landlords were revealed to be borrowing less than half the total value of their investment portfolio.
As a result of the changes, more residential landlords are looking to upgrade their existing portfolio. Just 12% said they would reduce maintenance on their property, down from 25% in the final quarter of 2015.
If you are a buy-to-let landlord looking to make improvements to your portfolio, you must remember not to neglect your gardens, particularly at this time of year.
What’s more, why not give your property a full MOT? It may sound a little premature, but by checking your boiler, radiators and gas appliances now, you will save running the risk of leaving your tenants cold in chillier months!
It also makes sense to familiarise yourself with the legislation changes, such as Right To Rent. Failure to comply with legislation could land you with a hefty fine or worse, so you need to be prepared.
While you are making sure your house (or houses!) is in order, why not look at taking out rent guarantee or unoccupied property insurance? Even the best tenants on paper can default on rent due to unforeseen circumstances.
Make sure you are ready for the worst and create the best portfolio you can!