Landlords have sharply increased the amount of equity they are withdrawing through remortgaging to fund improvements to their properties, as the buy-to-let market continues to recover from the turbulence that followed the 2022 mini-budget.
Industry figures show that in the first half of this year, £1.1 billion was raised for property improvements through 6,737 buy-to-let remortgage cases.
That compares with £712 million across 4,632 cases during the same period in 2024 — an increase of 54 per cent in value and 45 per cent in volume.
It marks the highest level of remortgage-funded property investment since the first half of 2022, when landlords withdrew £1.28 billion from 8,032 loans. Activity slumped the following year as soaring mortgage rates forced many to switch products with their existing lender to manage affordability rather than release equity.
REFURBISHMENT STRATEGY
Since then, volumes have steadily recovered, with landlords increasingly using remortgaging to modernise and improve the energy efficiency of their properties.
The trend is supported by research for Paragon Bank’s Improving Standards and Sustainability in Privately Rented Properties report, which found that 44% of landlords pursue a strategy of acquiring homes in need of refurbishment. On average, landlords spend £8,500 a year across their portfolios on upgrades.
REAL MARKET IMPACT
Louisa Sedgwick, managing director of mortgages at Paragon Bank, says: “As we near the three-year anniversary of the mini budget, we can look back at how it has influenced landlord behaviour in the time since.
“This data shows how it had a very real impact on the market, curtailing investment in improving privately rented homes.
“But it’s encouraging to see this recover over the past couple of years and approach the levels recorded before market turmoil.
“This reaffirms the resilience of the market and shows that landlords will take advantage of a comparatively favourable borrowing environment to enhance their propositions, leveraging equity to make improvements to their properties.”
