Landlords withdrew almost £2.4 billion of equity from their buy-to-let portfolios last year to fund property improvements as preparations for incoming regulation gathered pace.
Analysis by Paragon Bank shows that £2.37 billion was released through remortgaging during 2025 for refurbishment and upgrade works, a 60% increase on the £1.48 billion withdrawn in 2024.
The total was spread across 14,817 remortgage transactions, with landlords releasing an average of almost £43,000 per loan. A year earlier, 9,754 remortgages were completed for the same purpose.
The increase comes as landlords face growing pressure to improve housing standards ahead of reforms linked to the Renters’ Rights Act and future Minimum Energy Efficiency Standards (MEES) requirements.
REFURBISHMENT COSTS
Paragon says the findings mirror earlier research showing that 44% of landlords actively seek out properties requiring improvement work, investing an average of £8,500 per property. The most common upgrades include new boilers, replacement kitchens and bathrooms, and remedial work to address damp and structural issues.
The lender believes the trend highlights how landlords are using accumulated equity to modernise stock, improve tenant appeal and protect long-term property values.
The findings also point to growing refinancing opportunities for brokers. Separate research undertaken by Pegasus Insight on behalf of Paragon found that four in 10 landlords plan to refinance during the next year, rising to 57% among landlords with four or more properties.
RENTERS’ RIGHTS ACT
Louisa Sedgwick (main picture), Managing Director of Mortgages at Paragon Bank, says: “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“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driver, but landlords will also benefit from likely increases in the value of their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.”
GREEN FINANCE
Sedgwick adds: “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.”
