According to analysis of industry figures by Paragon Bank, the value of equity withdrawn between January and June to fund portfolio expansion was higher than any other corresponding period since 2018, when data was first collected.
The equity released comprises 9,852 remortgages where property wealth was withdrawn to add to portfolios. The number of remortgages completed for this purpose was the highest H1 volume in seven years, excluding 2021 when 10,028 remortgages were transacted as interest rates were at a record low and the stamp duty holiday was in place.
Further, the value of investment in portfolio expansion rose 30% compared to the first six months of 2023, when the market was in a high-interest-rate environment due to the mini Budget. During that period, 8,133 remortgages were completed at a value of £1.49bn to fund expansion, and in 2024, this rose to 9,088 loans at a value of £1.67bn.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “The growth in equity withdrawal for portfolio expansion suggests that landlords are managing their businesses astutely. Proactively leveraging the capital appreciation enables landlords to strategically reconfigure their portfolios, investing in the propositions that offer the best returns to remain profitable, despite the economic pressures felt across all sectors in recent years.
“With interest rates gradually coming down, remortgaging is likely to continue to make up a substantial volume of lending. By proactively working with landlords and discussing their plans, brokers can identify opportunities to secure business ahead of mortgages maturing.”
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