Landlords release £2.37bn to fund property improvements

UK landlords released a substantial £2.37 billion in equity from their rental properties during 2025, marking a significant 60% increase compared to the previous year. This surge in borrowing primarily aims to fund property improvements, reflecting landlords’ proactive response to evolving regulatory requirements and tenant expectations within the private rented sector.

Rising Remortgage Activity to Support Property Upgrades

Analysis by Paragon Bank reveals that this increased release of funds occurred through nearly 15,000 remortgage transactions in 2025, up from just under 10,000 in 2024. The data suggests landlords are increasingly leveraging the equity built up in their portfolios to finance essential maintenance and upgrades. This trend coincides with landlords preparing for forthcoming obligations under the Renters’ Rights Act, which introduces new standards for rental properties.

Part of the capital raised is anticipated to support compliance with the proposed extension of the Decent Homes Standard to privately rented properties. This would require landlords to meet higher quality and safety benchmarks, prompting many to invest in improvements ahead of formal enforcement.

Strategic Use of Buy-to-Let Borrowing

Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, highlights that landlords are deliberately structuring their buy-to-let financing to unlock equity for property enhancements. She notes that the timing of the increase aligns with landlords’ efforts to meet new legislative requirements, while also enhancing the value and appeal of their investments to prospective tenants.

However, Sedgwick also points to a potential compliance gap, noting that nearly 60% of landlords do not obtain updated Energy Performance Certificates (EPCs) after completing energy efficiency improvements. This oversight could create uncertainty regarding compliance with forthcoming Minimum Energy Efficiency Standards (MEES) and may result in missed opportunities to access preferential green financing options.

Common Improvement Areas and Investment Levels

Previous research by Paragon Bank indicates that 44% of landlords focus their improvement efforts on properties requiring work, with an average spend of around £8,500 per property. Typical upgrades include installing new boilers, modernising kitchens and bathrooms, and addressing issues such as damp and structural repairs. These investments not only improve tenant satisfaction but also contribute to meeting evolving regulatory standards.

Additionally, separate findings show that 40% of landlords intend to refinance their properties in the current year, with this figure rising to 57% among those managing portfolios of four or more properties. This refinancing activity is expected to increase further as landlords seek finance to meet the proposed MEES requirement for rental properties to achieve an EPC rating of C or above by 2030.

Implications of the Renters’ Rights Act on Landlord Finance

The Renters’ Rights Act introduces new responsibilities for landlords, including enhanced property standards and tenant protections. The increased borrowing activity observed suggests landlords are responding by investing in their properties to ensure compliance and maintain competitiveness in the rental market. While this represents a positive step towards improving rental housing quality, landlords should be mindful of the financial commitments involved and plan accordingly.

Landlords should also be aware that failure to comply with new standards could lead to enforcement action and impact their ability to let properties effectively. Ensuring that improvements are properly documented, including obtaining updated EPCs where relevant, will be crucial to demonstrating compliance and accessing favourable financing options.

What this means for landlords

Landlords should consider reviewing their current financing arrangements to assess whether remortgaging or refinancing could support necessary property improvements, particularly in light of upcoming regulatory changes. Strategic borrowing can enable landlords to enhance property standards, improve energy efficiency, and increase tenant appeal, which may contribute to long-term portfolio value.

It is also important for landlords to ensure that any works undertaken are properly recorded and that updated EPCs are obtained where energy efficiency improvements have been made. This will help avoid compliance ambiguities and may open access to green finance products designed to support sustainable property upgrades.

What TLA members should consider

• Review existing mortgage and financing options to identify opportunities for equity release to fund property improvements.
• Plan property upgrades with a focus on meeting the Renters’ Rights Act requirements and proposed Decent Homes Standard.
• Ensure Energy Performance Certificates are updated promptly following any energy efficiency works to confirm compliance with MEES.
• Maintain thorough records of all improvement works and related documentation to support compliance and potential enforcement inquiries.
• Consider consulting with mortgage brokers or financial advisors specialising in buy-to-let lending to explore suitable refinancing options.
• Stay informed about evolving regulations and guidance through membership resources such as the TLA Renters’ Rights Act compliance pack.

TLA Training Academy

The Landlord Association provides structured guidance, compliance education and practical support for landlords, letting agents and property professionals. Members can access training and resources designed to help them stay organised, informed and prepared.

Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/

Those looking to join and access member support can register here: https://landlordassociation.org.uk/get-started-with-the-landlord-association/

TLA update

The Landlord Association is continuing to expand its support, resources and partner network for landlords, tenants, agents and property professionals across the UK. Service providers interested in working with TLA can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/