Landlords have withdrawn a record amount of equity from buy-to-let remortgages in the first half of the year, signalling a clear shift in confidence and investment behaviour. New data from Paragon Bank shows that between January and June, property investors released £1.94 billion to fund further acquisitions, restructure portfolios, or reinvest in higher-yield properties – a trend likely to influence supply, rental pricing, and long-term investment strategy.
Rent growth outlook strengthens investor confidence
This marks the highest equity withdrawal recorded for an opening six-month period since Paragon began tracking the metric in 2018. For many landlords, rising rents and stabilising interest rates are creating conditions where reinvestment begins to make strategic sense again.
Rental prices increased nearly 8% year-on-year, according to recent ONS housing market figures, equating to roughly £90 more per month for the average tenancy. While some may see this as landlord benefit, many in the sector argue rents have been catching up with rising mortgage costs, tax changes, and regulatory pressures rather than delivering windfall returns.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said the latest activity shows landlords are adapting intelligently:
“The growth in equity withdrawal for portfolio expansion suggests that landlords are managing their businesses astutely. Proactively leveraging capital appreciation enables landlords to strategically reconfigure portfolios and invest where returns remain viable despite wider economic pressures.”
She added that falling interest rates are likely to sustain this trend:
“With interest rates gradually coming down, remortgaging is likely to continue to make up a substantial volume of lending.”
Specialist finance for landlords drives portfolio restructuring
Paragon’s analysis confirms that 9,852 loans completed in the first six months involved equity extraction. That volume is just below the exceptional spike seen in the first half of 2021, when cheap funding and the Stamp Duty holiday created a unique financing environment.
However, unlike 2021, today’s activity is not driven by incentives – but by strategy.
The market appears to be normalising:
- Early 2023: 8,133 equity-withdrawal loans, worth £1.49bn
- Early 2024: 9,088 loans, worth £1.67bn
- Now (2025): £1.94bn, marking a 30% increase in value in two years
This suggests landlords are selectively upgrading portfolios – swapping low-yield properties for higher-performing assets or expanding into regions where yields remain competitive.
Landlord investment trends signal a shift in long-term sentiment
Agents report that landlords releasing equity are not exiting the sector – a dominant theme across 2022-23 – but instead repositioning for future growth. Some are purchasing HMOs, EPC-compliant stock, or student lets; others are refinancing to future-proof buy-to-let borrowing costs before further rate changes.
A letting agent in Manchester described recent investor behaviour as “cautiously opportunistic”, noting that properties with EPC C ratings and strong rental demand are now selling faster to landlord buyers than first-time buyers – a reversal of patterns seen during the pandemic.
And while tax and regulatory pressures continue, the data suggests that many landlords are no longer simply reacting to legislation – they are planning ahead.
Editor’s view
Equity withdrawal at record levels is not a sign of distress – it’s a signal of re-entry. After years of uncertainty, punitive policy shifts, and volatile mortgage pricing, landlords are beginning to treat the sector strategically again. If interest rates continue easing and policy stabilises after the next Budget, this could mark the early stages of a wider return of professional investment – something the UK rental market desperately needs.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance.
Published: 26 November 2025
Sources: Paragon Bank mortgage lending data, ONS UK Rental Price Index, NRLA market commentary
Related reading: Rent demand shifts as Bristol and Bolton emerge as buy-to-let hotspots
