Landlords sitting on significant equity, but much of it remains unused

Property118

Landlords sitting on significant equity, but much of it remains unused

A quieter theme emerging from the latest landlord data is not about borrowing, but about what is not being done with existing equity. According to the Property118 Landlord Sentiment Survey Q1 2026, a large proportion of landlords now operate with low loan-to-value ratios or no borrowing at all, indicating substantial levels of equity sitting within portfolios.

Based on 2,380 completed responses, the majority of landlords report loan-to-value ratios below 50%, with many holding properties outright. You can explore the full dataset here.

The implication is clear: significant capital exists within the sector, but much of it is not actively deployed.

Equity without direction

For many landlords, equity has built up gradually over time through capital growth and mortgage repayment. This has created a position of financial strength, but not always a clear plan for what that capital is intended to achieve. In some cases, it simply remains within the properties themselves, without being actively utilised.

This is not necessarily a problem, but it does raise an important question:

If the equity is not being used to support growth, income or wider financial planning, what role is it serving?

From growth to preservation

The shift towards lower leverage suggests a broader change in mindset. Earlier stages of portfolio building often involve higher borrowing levels to accelerate growth. Over time, as portfolios mature, the focus tends to move towards consolidation and risk reduction.

The survey findings reflect this transition.

Many landlords are no longer looking to expand aggressively. Instead, they are holding substantial equity while reassessing their long-term objectives.

Opportunity or inefficiency?

Unused equity can be viewed in two ways. On one hand, it provides security. Lower borrowing reduces financial risk and creates resilience against market fluctuations. On the other, it may represent an opportunity cost.

Capital tied up in property is not easily accessible, and if it is not being actively deployed, it may not be contributing fully to income generation or broader financial planning.

This is where the distinction between holding assets and actively managing them becomes more relevant.

A factor in changing behaviour

The presence of significant equity also influences how landlords respond to current market conditions. As highlighted elsewhere in the Property118 dataset, many landlords are planning to reduce their portfolios or exit entirely. When equity levels are high, these decisions become easier to implement. Selling a property with low or no debt is a straightforward way to release capital, particularly if there is no immediate need to refinance or restructure, but is that the best option to choose?

A turning point in how portfolios are used

The data suggests that many landlords are approaching a turning point. Having built substantial equity over time, the focus is shifting from accumulation to utilisation. The question is no longer how to build the portfolio, but what to do with what has already been created.

For now, one conclusion stands out: a significant proportion of landlord wealth is tied up in property, but without a clear strategy, that equity risks remaining passive rather than productive.

A conversation worth having?

If you are weighing up your own strategy, whether that’s to sell, expand, or restructure to improve profitibility, it is worth having a discussion with a Property118 consultant to take a closer look at how your portfolio is structured as a whole now, and to forecast the outcomes based on multiple scenario’s.

These conversations are typically most useful for landlords with established portfolios and relatively modest borrowing who are beginning to reflect on how their assets could work more effectively in the years ahead.

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