Landlords withdraw record equity for portfolio expansion

Landlords pulled record levels of equity from buy to let remortgages in the first six months of the year as confidence slowly returned to the market.

A Paragon Bank analysis shows that between January and June, investors withdrew £1.94 billion to finance portfolio growth.

That’s the largest amount ever recorded for an opening half year since the data series began in 2018.

The surge in activity reflects a renewed willingness among landlords to restructure their holdings, the bank says.

Leveraging the capital appreciation

Paragon’s managing director of mortgages, Louisa Sedgwick, said: “The growth in equity withdrawal for portfolio expansion suggests that landlords are managing their businesses astutely.

“Proactively leveraging the capital appreciation enables landlords to strategically reconfigure their portfolios, investing in the propositions that offer the best returns to remain profitable, despite the economic pressures felt across all sectors in recent years.”

She added: “With interest rates gradually coming down, remortgaging is likely to continue to make up a substantial volume of lending.”

Landlords extracting equity

The total withdrawal amount came from 9,852 completed remortgages, each involving equity being extracted for expansion.

While the figure sits just below the exceptional 10,028 recorded during the first half of 2021, that spike was driven by cheap borrowing and the Stamp Duty holiday.

This year’s numbers point to a clear trend emerging as investment volumes have climbed steadily since the mini-Budget.

In early 2023, lenders handled 8,133 loans worth £1.49 billion.

A year later, the volume reached 9,088 with a total value of £1.67 billion.

The latest jump marks a 30% rise in value over that two-year period.

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