Landlords borrow billions to fund property upgrades

Landlords are spending more than £8,000 a year on property improvements, as figures reveal a steep rise in extra buy-to-let (BTL) borrowing for upgrades.

Data from Paragon Bank shows that in the first half of 2024, landlords accessed £712 million in equity for property improvements through 4,632 remortgage cases.

During the same period in 2025, almost £1.1 billion was raised for the same purpose across 6,737 remortgage cases.

Surge in mortgage rates in the wake of the mini budget

According to Paragon Bank, 2025 has seen the highest level of remortgage-funded property improvements by landlords since the first half of 2022, when 8,032 remortgages released £1.28 billion in equity.

This represents a 93% increase in value and a 74% rise in volume compared to the same period a year later, when equity withdrawn fell to £662 million across 4,605 remortgage cases.

The bank says 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Since then, as the market has recovered, the value and volume of equity withdrawn for property improvement has steadily increased.

Reaffirms the resilience of the market

Louisa Sedgwick, Paragon Bank managing director of Mortgages, said: “As we near the three-year anniversary of the mini budget, we can look back at how it has influenced landlord behaviour in the time since. This data shows how it had a very real impact on the market, curtailing investment in improving privately rented homes.

“But it’s encouraging to see this recover over the past couple of years and approach the levels recorded before market turmoil. 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.”

The bank also reveals that a significant proportion of landlords (44%) adopt a strategy of acquiring homes in need of improvement. Across their portfolios, landlords spend approximately £8,500 a year making improvements.