Landlords have splurged a whopping £2.37 billion on enhancing their rental properties last year, marking a 60% increase from the previous year's figure of £1.48 billion. This significant investment was facilitated by 14,817 remortgages in 2025, up from 9,754 the previous year, according to analysis by Paragon Bank.
The main driver behind this surge is the proposed application of the Decent Homes Standard to privately rented properties. Currently applicable only to social housing, the standard aims to ensure homes are safe, well-maintained and equipped with modern facilities. Landlords are using equity built up in their portfolios to fund upgrades, including installing new boilers, updating kitchens and bathrooms, and tackling issues such as damp or structural problems.
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, notes that these figures demonstrate landlords' forward-thinking approach to buy-to-let borrowing. While the Renters' Rights Act is a significant factor, she believes landlords also stand to gain from potential property value increases and enhanced appeal to tenants, which can lead to higher rental yields.
However, Sedgwick warns that almost six in ten landlords are neglecting to reassess their Energy Performance Certificates (EPCs) after undertaking energy efficiency improvements. This oversight could create uncertainty about compliance with the proposed Minimum Energy Efficiency Standards (MEES), which will require privately rented homes to achieve an EPC rating of C or above by 2030.
Furthermore, landlords may be missing out on access to more favourably priced 'green finance' products designed to reward energy-efficient properties. Looking ahead, separate research indicates that four in ten landlords plan to refinance this year, a figure rising to 57% for those with larger portfolios of four or more properties.
The focus on property upgrades comes amidst a dynamic housing market, where house price data from sources like Rightmove and Zoopla shows regional variations. While some areas are experiencing sustained growth, others are seeing more modest increases – national average asking prices stand at £368,614 according to Rightmove.