Landlords increasingly remortgage portfolios to fund new investments

Landlords increasingly remortgage portfolios to fund new investments

Many UK landlords who remain active in the buy-to-let sector plan to refinance their existing properties over the next year to unlock equity and support further acquisitions, shifting investment focus to northern regions.

A recent analysis by Manchester-based lender Together reveals that despite significant exits from the buy-to-let market in recent years, a substantial proportion of landlords who have stayed invested are preparing to remortgage their portfolios. According to the lender’s data, 76% of landlords intend to refinance within the next 12 months to fund future property deals.

The study indicates that 36% of landlords are “very likely” to refinance their portfolios, while another 40% are “somewhat likely” to do so. This refinancing trend appears to be driven by a desire to capitalise on emerging opportunities outside traditional investment hotspots such as London and the South East.

Shifting investment patterns favour northern England and Scotland

Together’s funding activity since 2020 shows a clear geographical shift in buy-to-let lending. The North West of England increased its share of the lender’s buy-to-let funding by 3.3% between 2020 and 2025. Scotland’s share rose by 2%, and Yorkshire and the Humber by 1.1%. In contrast, Greater London and the South East saw their combined share fall from 23.6% in 2020 to less than 20% in 2025.

The lender suggests that this shift reflects investors’ interest in areas where rental affordability, demand, and long-term growth prospects remain strong. Landlords are increasingly looking beyond the traditional southern markets to regions with more attractive yields and less competition.

A spokesperson for Together commented that many investors are not merely holding on to existing assets but are actively releasing equity through remortgaging to reinvest. This behaviour signals confidence in the rental market’s future and a strategy to expand property portfolios by leveraging existing holdings.

Context of rising costs and regulatory pressures in the sector

The buy-to-let sector has faced mounting challenges in recent years, including increased tax burdens, tighter mortgage lending criteria, and heightened regulatory requirements such as the Renters’ Rights Act. These factors have contributed to a notable number of landlords exiting the market.

However, those who remain appear to be adapting their strategies to sustain and grow their investments. Refinancing existing properties to release capital is one such approach that enables landlords to fund new purchases without needing additional external capital.

Furthermore, the shift towards northern regions aligns with broader market trends where affordability and rental yields are more favourable compared to the South East. This repositioning may also reflect landlords’ attempts to mitigate risks associated with regulatory changes and cost pressures in traditionally high-demand areas.

Practical implications for landlords and letting agents

For landlords with small to medium portfolios, the trend towards remortgaging to fund further acquisitions underscores the importance of regularly reviewing mortgage arrangements and property valuations. Maintaining good relationships with lenders and understanding current refinancing options can provide flexibility to respond to market opportunities.

Letting agents should be aware of this refinancing activity as it may lead to increased property transactions and portfolio expansions among their landlord clients. Advising landlords on the implications of remortgaging, including potential costs and compliance considerations, will be valuable.

Additionally, the geographic shift in investment focus may affect lettings demand and property management strategies. Agents operating in northern regions could see increased landlord interest, while those in London and the South East might encounter a more cautious investor base.

Uncertainties and considerations ahead

While the data indicates a strong inclination towards refinancing, actual outcomes will depend on factors such as interest rate movements, lender policies, and broader economic conditions. The cost of borrowing remains a key variable that could influence landlords’ ability and willingness to remortgage.

The impact of ongoing regulatory changes, including the Renters’ Rights Act and potential local licensing expansions, may also affect landlords’ investment decisions and portfolio management. Staying informed about evolving compliance requirements is essential.

Landlords should monitor official guidance and seek professional advice when considering refinancing and portfolio growth to ensure alignment with legal obligations and financial goals.

What landlords should consider now

• Review existing mortgage terms and assess opportunities for remortgaging to release equity.
• Evaluate potential investment locations beyond traditional hotspots, focusing on rental demand and affordability.
• Stay updated on regulatory changes affecting tenancy law, property standards, and landlord obligations.
• Consider the financial implications of refinancing, including fees, interest rates, and tax consequences.
• Maintain thorough records of portfolio valuations, mortgage documents, and compliance activities.

Supporting landlords with portfolio management and compliance

The Landlord Association (TLA) offers membership resources that can assist landlords and letting agents in managing their portfolios amid these refinancing trends. Through TLA’s compliance materials and property management guidance, members can better organise documentation and monitor regulatory developments relevant to buy-to-let investments.

TLA’s new property management and compliance platform, ORBIT, currently available in BETA testing, is designed to help landlords and agents keep track of mortgage records, tenancy agreements, and compliance evidence in one place. Features under development include tools to record key portfolio actions and access tailored compliance support, which can be valuable when refinancing or expanding property holdings.

Exploring TLA membership and ORBIT BETA access can provide practical assistance for landlords aiming to navigate the complexities of portfolio refinancing and regulatory compliance.

Looking ahead, landlords who actively manage their financing strategies and stay informed on regulatory changes will be better positioned to capitalise on emerging investment opportunities across the UK.

Sources: Landlord Today