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Big rise in landlord buy-to-let borrowing for improvements

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Private landlords have borrowed millions more to improve their properties this year, according to new data.

Paragon Bank’s analysis of UK Finance figures on the purpose for new buy-to-let remortgages reveals that the first half of 2024 saw equity valuing £712 million used for property improvement in 4,632 remortgage cases. In 2025, almost £1.1 billion was raised for the same purpose across 6,737 remortgage cases - a steep rise of 54% in monetary terms and a 45% increase in the number of loans.  

This is the highest level of remortgage-funded property improvement by landlords since the first half of 2022 when 8,032 remortgages released £1.28 billion in equity. This was 93% higher by value and 74% by volume compared to the same period a year later when the total amount of equity withdrawn dropped to £662 million across 4,605 remortgage cases.

Surge

A surge in mortgage rates in the wake of the mini budget forced many landlords to switch to a product offered by their existing lender to overcome affordability challenges. Since then, as the market has recovered, the value and volume of equity withdrawn for property improvement has steadily increased.

Louisa Sedgwick, managing director of mortgages (pictured), says the mini budget had a very real impact on the market, curtailing investment in improving privately rented homes.

Turmoil

“It’s encouraging to see this recover over the past couple of years and approach the levels recorded before market turmoil,” she adds. “This reaffirms the resilience of the market and shows that landlords will take advantage of a comparatively favourable borrowing environment to enhance their propositions, leveraging equity to make improvements to their properties.”

Paragon’s previous research found that a significant proportion of landlords, 44%, adopt a strategy of acquiring homes in need of improvement, while they spend about £8,500 a year, across their portfolios, making improvements.

Tags:

Mortgages
Paragon bank
Mortgage rates

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