Landlords saw a 60% jump in refinancing mortgages last year to free up equity to improve owner-occupied and rental properties, according to an analysis of sector data by Paragon Bank.
The analysis found that shares worth £2.37 billion were drawn down for property improvements through remortgages in 2025, a 60% increase on the £1.48 billion taken in 2024.
This 2025 total included 14,817 remortgages, resulting in an average of almost £43,000 per loan, compared to 9,754 remortgages the year before.
The growth of loans to finance real estate improvements correlates with the increased focus on… Tenants’ Rights Actindicating that landlords have invested in ensuring they comply with upcoming elements of the law, such as the Decent Homes Standard.
The findings are in line with previous research from Paragon, which shows that 44% of landlords are actively targeting homes in need of improvements, spending an average of £8,500 per property, usually on installing new boilers, fitting new bathrooms or kitchens or tackling damp or structural issues.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “These figures show how landlords are strategically structuring their buy-to-let loans, leveraging the significant amounts of equity they have built up in 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“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driving force, but landlords will also benefit from the likely increases in the value of their investments and the added appeal to tenants.”
Four in 10 landlords plan to refinance this year, rising to 57% among those with four or more properties, according to research conducted by Pegasus Insight on behalf of Paragon.
This highlights the opportunities for agents as the upcoming MEES (Minimum Energy Efficiency Standards) regulations will require landlords to fund sustainability-focused upgrades to ensure their properties reach EPC C or higher by 2030.
Sedgwick added: “Our previous research has shown that almost six in ten landlords are not having their EPCs assessed after carrying out work to make their properties more energy efficient. This could not only lead to uncertainty about compliance with new MEES, but could also mean they miss out on preferentially priced green finance products.”