60% surge in remortgaging to make homes better

Landlords looking to improve their buy-to-let properties drove a 60% surge in equity released for property improvements through mortgages. With more property standard compliance changes on the horizon, brokers should be ready to help landlords release even more, according to analysis by Paragon Bank.

Its study showed that equity valued at £2.37 billion was withdrawn for property improvements during 2025 through remortgaging. The figure was up 60% compared to the £1.48 billion withdrawn in 2024. Spread across 14,817 remortgages in 2025, each loan averaged around £43,000 and compared with 9,754 remortgages in 2024.

Earlier research from Paragon suggests that 44% of landlords actively target homes in need of improvement and spend an average of £8,500 per property, most commonly installing new boilers, fitting new bathrooms or kitchens or addressing damp or structural issues.

New compliance obligations

Landlords have had to improve property standards in general with the Renters’ Rights Act now in force. However, other elements, such as the Decent Homes Standard, could also require investment.

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“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driver, but landlords will also benefit from likely increases in the value of their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.” 

Research undertaken by Pegasus Insight on behalf of Paragon suggests that four in 10 landlords plan to refinance this year, increasing to 57% among those with four or more properties.

Opportunities for brokers

Sedgwick said this highlights the opportunities for brokers as the forthcoming Minimum Energy Efficiency Standards (MEES) regulations will require landlords to fund sustainability-focused upgrades to ensure their properties reach EPC C or above by 2030.

However, she warned that landlords should get their properties assessed once work is done. “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.”