Paragon says that industry figures in the first half of the year in 2024 around £712m of equity was used for property improvements in 4,632 remortgages.
Going forward into the first half of this year, around £1.1bn was raised for the same purpose across 7,737 remortgage cases.
This is a rise of 54% in monetary terms and a 45% increase in the number of loans, Paragon said.
The lender said this was the highest level of remortgage-funded property improvement by landlords since the first half of 2022, when 8,032 remortgages were used to release £1.28bn in equity.
The report continued that this was 93% higher by value and 74% higher than in 2021, when the total amount of equity withdrawn fell to £663m across 4,605 remortgage cases.
Aldermore Insights with Jon Cooper: Edition 9 – Why lending strategy is becoming more central in buy to let
Sponsored by Aldermore
A rapid rise in mortgage rates following the mini Budget, Paragon said, may have forced landlords to opt for a product switch to overcome affordability challenges.
Paragon said that the market has recovered as the value and volume of equity withdrawn for property improvement steadily increased.
The firm said that its own research showed 44% of landlords adopted a strategy of buying homes in need of improvement, and landlords spent around £8,500 a year across their portfolios making improvements.
Louisa Sedgwick, Paragon Bank’s managing director of mortgages, said: “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.”
