Landlords drove a 60% jump in remortgaging to release equity for buy-to-let property improvements last year, according to Paragon Bank analysis of industry data.
The analysis showed that equity worth £2.37 billion was withdrawn for property improvements during 2025 through remortgaging, up 60% compared with the £1.48 billion withdrawn in 2024. This total was spread across 14,817 remortgages, resulting in each loan averaging almost £43,000, compared with 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 compliance with forthcoming elements of the act, such as the Decent Homes Standard.
The findings align with earlier Paragon research showing that 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.
"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," said Louisa Sedgwick, managing director of mortgages at Paragon Bank (pictured).
"The timing of the increase in equity withdrawn for property improvements suggests that the Renters' Rights Act is a driver, but landlords will also benefit from likely increases in the value of their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, rising to 57% among those with four or more properties, according to research carried out by Pegasus Insight on behalf of Paragon.
This points to clear 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 that gaps in compliance tracking could leave landlords exposed. "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," she said.
"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."
