Landlords drive remortgaging to make homes better

Landlords withdrew equity valued at £2.37 billion for property improvements during 2025 through remortgaging, up 60% compared to the £1.48 billion withdrawn in 2024, according to analysis by Paragon Bank.

The 2025 total, across 14,817 remortgages, averaged individual loan amounts of nearly £43,000, compared with 9,754 remortgages the year before.

New compliance obligations

The focus on property investment and improvement follows the introduction of the Renters’ Rights Act, which will eventually also include new compliance obligations such as the Decent Homes Standard. Landlords also face changes to Minimum Energy Efficiency Standards (MEES), which requires landlords to upgrade the energy efficiency of a property to EPC C or above by 2030.

Earlier Paragon research highlighted that 44% of landlords actively target homes that need work, spending an average of £8,500 per property usually on installing new boilers, fitting new bathrooms or kitchens or addressing damp or structural issues.

Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “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“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driver, but landlords will also benefit from likely increases in the value of their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.”