UK landlord profitability is now at a six-year high, with rental yields hitting new records, according to research from Pegasus Insight.
Nearly nine in 10 (89%) landlords were found to currently report making a profit from rental activity, the highest level since 2019.
Among them, 17% said the profits were huge, and 72% said the profits were meager. Only 7% said they were making ends meet, and only a handful reported any kind of losses.
The continued rise in rental yields supported improvements in profitability. In the third quarter of 2025, the average realized gross rental yield reached 6.6%, exceeding the 10-year high of 6.3% set in the third quarter of last year.
Landlords in the North West (7.4%) and Yorkshire and the Humber (7.2%) continue to deliver the strongest returns.
While landlords’ financial conditions are improving, research also shows forward-looking sentiment has weakened.
Expectations for future yields and capital gains both fell sequentially, down 3% and 4% respectively, reflecting continued caution about further economic and regulatory changes.
Mark Long, managing director of Pegasus Insight, said: “What’s really striking in the third quarter data is the gap between how landlords are performing today and how they feel about the future.
“Looking at the hard data, profitability and yields are the strongest we have seen in many years, which is a clear sign of the resilience of the industry.
“At the same time, confidence index edged lower, which tells us that landlords are remaining cautious rather than complacent. Many are choosing to consolidate, focus on cash flow and carefully manage their portfolios, which is smart behavior in an environment where policy and cost pressures remain top of mind.”
