Landlords significantly increased borrowing against their property portfolios in 2025, using remortgaging to release equity and fund improvements to buy-to-let homes, according to new research from Paragon Bank.
The data shows that around £2.37 billion of equity was withdrawn specifically for property upgrades over the year, marking a 60% rise compared with £1.48 billion in 2024. This reflects a growing trend among landlords who are choosing to reinvest the value built up in their portfolios into improving the quality and compliance of their properties.
Across 2025, this activity was spread across 14,817 remortgage cases, up from 9,754 the year before. The average amount released per loan was close to £43,000, indicating that landlords are not only refinancing more frequently but are also accessing larger sums to support renovation work.
Rising investment in property improvements
Paragon’s findings suggest that landlords are increasingly prioritising upgrades to their rental properties, driven in part by tightening regulatory expectations and a stronger focus on energy efficiency standards.
Much of this activity is linked to preparation for upcoming changes under the Renters’ Rights Act, which is expected to introduce further requirements such as the Decent Homes Standard. As a result, many landlords appear to be acting early to ensure their properties remain compliant and attractive to tenants.
Earlier research from Paragon also found that 44% of landlords actively target properties that require improvement. On average, they spend around £8,500 per property, with common works including installing new boilers, updating kitchens and bathrooms, and addressing damp or structural issues.
Equity release becoming a key funding strategy
Rather than relying solely on savings or external financing, landlords are increasingly using remortgaging as a practical way to unlock equity from their portfolios.
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, noted that landlords are taking a more strategic approach to borrowing, using built-up equity to fund improvements that can enhance both rental income and long-term property value.
She also highlighted that the timing of increased equity withdrawal suggests a response to regulatory change, but also reflects wider benefits such as improved tenant demand and potential capital growth following refurbishment work.
More landlords turning to refinancing
The trend is expected to continue, with additional research showing that around 40% of landlords are planning to refinance this year. This figure rises to 57% among landlords with four or more properties, underlining how portfolio landlords in particular are actively reshaping their finances.
This growing level of refinancing activity presents opportunities for mortgage brokers, especially as landlords prepare for upcoming Minimum Energy Efficiency Standards (MEES) requirements. These rules are expected to require rental properties to achieve at least EPC rating C by 2030, increasing the need for energy-efficient upgrades.
Energy efficiency and compliance pressures
As sustainability targets become more important, landlords are under increasing pressure to invest in improvements that reduce energy consumption and meet future regulations.
However, Paragon also warns that many landlords are not reassessing Energy Performance Certificate (EPC) ratings after completing renovation work. This means some may not fully understand whether their properties meet current or upcoming standards, potentially creating compliance risks.
In addition, failing to update EPC ratings could also mean landlords are missing out on access to preferential green finance products, which often offer more competitive borrowing rates for energy-efficient upgrades.
Wider market implications
The rise in borrowing for property improvements reflects a broader shift in the buy-to-let sector, where landlords are becoming more proactive in managing asset quality and regulatory compliance.
With pressure building from both legislation and tenant expectations, remortgaging is likely to remain a key tool for funding upgrades over the coming years. At the same time, the emphasis on energy efficiency is expected to continue shaping investment decisions across the private rental sector.
Overall, the findings highlight a market that is adapting to change, with landlords increasingly using available equity not just for expansion, but to future-proof existing portfolios.
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