UK landlord profitability is now at a six-year excessive, with rental yields setting a brand new file, in keeping with analysis from Pegasus Perception.
Discovered that almost 9 in ten landlords (89%) now report making a revenue from their lettings exercise, the very best stage recorded since 2019.
Of those, 17% say they’re making a big revenue, whereas an additional 72% report a small revenue. Simply 7% say they’re breaking even, and solely a small minority report any type of loss.
The development in profitability is being supported by a continued rise in rental yields. In Q3 2025, the typical achieved gross rental yield reached 6.6%, surpassing the earlier 10-year excessive of 6.3% recorded in Q3 final 12 months.
Landlords working within the North West (7.4%) and Yorkshire and the Humber (7.2%) proceed to ship the strongest returns.
Whereas landlord funds are bettering, the analysis additionally exhibits a softening in forward-looking sentiment.
Expectations for future yields and capital positive factors each dipped quarter on quarter, down 3% and 4% respectively, reflecting ongoing warning of additional financial and regulatory change.
Pegasus Perception managing director Mark Lengthy mentioned: “What actually stands out within the Q3 knowledge is the hole between how landlords are performing at this time and the way they really feel in regards to the future.
“On the laborious numbers, profitability and yields are the strongest we’ve seen for years, which is a transparent signal of resilience within the sector.
“On the identical time, confidence indicators have edged decrease, which tells us landlords are remaining cautious somewhat than complacent. Many are selecting to consolidate, concentrate on money circulation and handle their portfolios fastidiously, wise behaviour in an setting the place coverage and value pressures stay entrance of thoughts.”
