Landlords are on a borrowing spree, remortgaging to the tune of a whopping £2.37 billion in 2025, according to Paragon Bank. That's a 60% leap from the previous year, as landlords tap into their property equity to spruce up their buy-to-let investments.
Why the sudden rush to remortgage? It seems the Renters Rights Act and an increased focus on energy efficiency are the culprits. With the Decent Homes Standard looming, landlords are keen to ensure compliance while adding value to their properties. The average remortgage loan hit nearly £43,000, funding upgrades like new boilers, kitchens, and bathrooms.
Paragon's research shows that 44% of landlords are targeting homes needing improvement, spending an average of £8,500 per property. This strategic investment not only boosts property value but also makes rentals more appealing to tenants.
Louisa Sedgwick from Paragon Bank notes that landlords are cleverly leveraging their equity to finance these improvements, with a keen eye on the benefits of increased property values and tenant appeal.
But the borrowing bonanza doesn't stop here! With the Minimum Energy Efficiency Standards (MEES) regulations on the horizon, landlords are gearing up for more sustainability upgrades. The goal? Achieving an EPC rating of C or above by 2030.
Interestingly, many landlords aren't reassessing their EPCs after making energy-efficient changes, potentially missing out on green finance perks. So, brokers, take note—there's a golden opportunity here to guide landlords through the refinancing maze and help them capitalise on eco-friendly finance options.
In short, it's a win-win for landlords and tenants alike, with greener homes and happier renters on the horizon!
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