Landlord profitability in Britain is now at its highest level in six years, with rental income setting a new record, according to research from Pegasus Insight.
Discovered that almost nine in ten landlords (89%) now report making a profit from their rental activities, the highest level since 2019.
Of these, 17% say they make a large profit, while another 72% report a small profit. Only 7% say they break even, and only a small minority report any kind of loss.
The improvement in profitability is supported by a continued increase in rental income. In the third quarter of 2025, the average gross rental yield achieved was 6.6%, surpassing the previous 10-year high of 6.3% recorded in the third quarter of last year.
Landlords operating in the North West (7.4%) and Yorkshire and the Humber (7.2%) continue to see the strongest returns.
While landlords’ finances are improving, the survey also shows a weakening of forward-looking sentiment.
Expectations for future returns and capital gains both fell quarter-on-quarter, by 3% and 4% respectively, reflecting continued caution about further economic and regulatory changes.
Pegasus Insight director Mark Long said: “What really stands out in the third quarter data is the gap between how landlords are performing today and how they think about the future.
“Based on the hard numbers, profitability and returns are the strongest we have seen in years, which is a clear sign of the resilience in the sector.
“At the same time, confidence indicators have fallen, indicating that landlords remain cautious rather than complacent. Many are choosing to consolidate, focus on cash flow and carefully manage their portfolios, sensible behavior in an environment where policy and cost pressures remain paramount.”