Last year, equity of £2.37bn was withdrawn for property improvements through remortgaging, according to Paragon Bank’s analysis of industry data.
This is a rise of 60% compared to 2024, which saw £1.48bn withdrawn.
Paragon Bank’s analysis noted that the 2025 total applied across 14,817 remortgages, with each loan averaging almost £43,000, versus the 9,754 remortgages in 2024.
It said the rise in borrowing to fund property improvements correlated with the increased awareness of and focus on the Renters’ Rights Act, the first stages of which came into force on 1 May. Forthcoming features of the act include compliance with the Decent Homes Standard. Paragon Bank said the increase in investment suggests landlords want to ensure they meet this standard.
Last year, Paragon Bank found that almost half – 44% – of landlords actively target homes in need of improvement and spent £8,500 per property on average. New boiler installation, fitting new kitchens or bathrooms and damp or structural issues were the most common things they addressed.
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Louisa Sedgwick, managing director of mortgages at Paragon Bank, commented: “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“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driver, but landlords will also benefit from likely increases in the value of their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.
“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.”
