Landlords are increasingly turning to equity release as a means to upgrade their rental properties, with a significant 60% rise in remortgaging activity noted in the past year. This trend highlights a strategic shift among landlords who are utilising the equity built in their properties to fund essential improvements.
TL;DR: Landlords withdrew £2.37 billion in equity for property upgrades in 2025, a 60% increase from 2024; this trend indicates a growing focus on enhancing rental properties to meet new standards.
Why Are Landlords Remortgaging?
According to analysis from Paragon Bank, landlords withdrew a total of £2.37 billion in equity through remortgaging in 2025, a notable increase from £1.48 billion in 2024. This surge was driven by 14,817 remortgages, with an average withdrawal of nearly £43,000 per loan. The data suggests that landlords are increasingly prioritising property improvements, with 44% actively seeking homes that require renovation.
What Improvements Are Landlords Making?
Landlords are spending an average of £8,500 on upgrades, focusing primarily on essential enhancements such as new boilers, bathrooms, kitchens, and addressing damp or structural issues. These improvements not only enhance the quality of the rental properties but also align with upcoming regulatory requirements.
What Does This Mean for Landlords?
With four in ten landlords planning to refinance in the coming year—rising to 57% among those with four or more properties—the demand for remortgaging is expected to continue. The forthcoming Minimum Energy Efficiency Standards (MEES) regulations, which require properties to achieve an EPC rating of C or above by 2030, further incentivise landlords to invest in energy-efficient upgrades. However, it’s noteworthy that nearly 60% of landlords do not assess their EPC ratings after making improvements, which could impact their compliance efforts.
Frequently Asked Questions
How can landlords benefit from equity release?
Equity release allows landlords to access funds from their property to finance necessary upgrades, helping to improve rental value and comply with regulations.
What are the implications of MEES regulations for landlords?
MEES regulations require properties to meet minimum energy efficiency standards by 2030, pushing landlords to invest in upgrades to avoid penalties and enhance property appeal.