Landlords drove a 60% jump in remortgaging to release equity to improve buy-to-let properties last year, Paragon Bank analysis of industry data has revealed.
The analysis showed that equity valuing £2.37 billion was withdrawn for property improvements during 2025 through remortgaging, up 60% compared to the £1.48 billion withdrawn in 2024.
This 2025 total was across 14,817 remortgages, resulting in each loan averaging almost £43,000, compared to 9,754 remortgages the year previously.
The growth in borrowing to fund property improvement correlates with the increased focus on the Renters’ Rights Act, suggesting that landlords have invested to ensure they are compliant with forthcoming elements of the Act, such as the Decent Homes Standard.
The findings align with earlier Paragon research highlighting how 44% of landlords actively target homes in need of improvement and spend an average of £8,500 per property, most commonly installing new boilers, fitting new bathrooms or kitchens or addressing damp or structural issues.
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank said: “These figures reveal how landlords are strategically structuring their buy-to-let borrowing, leveraging the considerable amounts of equity they have built across their portfolios to finance property improvements.
“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driver, but landlords will also benefit from likely increases in the value of their investments and the additional appeal to tenants.”
Four in 10 landlords plan to refinance this year, increasing to 57% amongst those with four or more properties, according to research undertaken by Pegasus Insight on behalf of Paragon.
This highlights the opportunities for brokers as the forthcoming Minimum Energy Efficiency Standards (MEES) regulations will require landlords to fund sustainability-focused upgrades to ensure their properties reach EPC C or above by 2030.
Sedgwick added: “Our earlier research revealed that almost six in 10 landlords don’t get their EPCs assessed after undertaking works to make their properties more energy efficient. Not only could this lead to ambiguity around compliance with any new MEES but could also mean that they’re missing out on preferentially priced green finance products.”
