Equity withdrawals for property works rose 60% in 2025 as landlords prepare for incoming regulatory requirements
Landlords remortgaged to release equity for buy-to-let property improvements at a sharply higher rate last year, with new analysis from Paragon Bank showing a 60% increase in the value of funds withdrawn for that purpose.
According to Paragon's analysis of industry data, £2.37 billion was released through remortgaging to fund property works in 2025, up from £1.48 billion the previous year. The total was spread across 14,817 remortgages, compared with 9,754 in 2024, with the average loan amounting to approximately £43,000.
Paragon attributed part of the increase to the Renters' Rights Act, suggesting landlords are investing to meet forthcoming compliance requirements, including the Decent Homes Standard.
The finding aligns with earlier research by Paragon, which found that 44% of landlords actively seek out properties in need of improvement and spend an average of £8,500 per property, with works most commonly covering boiler replacements, bathroom or kitchen refits, and damp or structural repairs.
"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," said Louisa Sedgwick (pictured right), managing director of mortgages at Paragon Bank.
"The timing of the increase in equity withdrawn for property improvements suggests that the Renters' Rights Act is a driver, but landlords will also benefit from likely increases in the value of their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 conducted by Pegasus Insight on behalf of Paragon found that four in 10 landlords plan to refinance in 2025, rising to 57% among those holding four or more properties. Paragon said the figures highlight broker opportunities ahead of incoming Minimum Energy Efficiency Standards (MEES) regulations, which will require properties to achieve an EPC rating of 'C' or above by 2030.
"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," Sedgwick said. "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."
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