The Landlord Trends research for Q1 2026 by Foundation in partnership with Pegasus Insight found that during the period, average rental yields also rose to 6.5%, up from 6.4% in Q4 2025.
Further, portfolio values and rental income increased since the previous quarter, which Foundation said pointed to sustained underlying asset performance.
Considering the stability of the investment, landlords regained confidence in Q1, with 63% intending to stay in the sector, a rise from 58% in Q4 2025.
Foundation’s research suggested there were fewer landlords intending to exit the rental market and instead choosing to adjust.
In Q1, rental growth continued to rise, albeit at a slower pace. Some 61% of landlords said they would increase rents over the next 12 months, with an average projected rise of 5.7%.
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Grant Hendry, director of sales at Foundation, said: “The latest data shows a landlord community and wider private rental sector that continues to prove its resilience. While landlords are clearly facing a range of challenges, from rising costs to regulatory change, the fundamentals remain strong. Profitability is holding up, yields are stable, and we’re seeing early signs that confidence is beginning to return.
“What is particularly notable is the way in which landlords are adapting. Portfolio sizes are increasing, more investors are taking a structured, long-term approach, and there is clear evidence of landlords planning ahead, whether that is through refinancing activity or preparing for future energy performance certificate (EPC) requirements.”
Continued landlord activity
Foundation found that landlords were still active in the sector, as 39% said they planned to remortgage in the next year. The average portfolio size also increased to 7.3 properties, indicating continued investment and a more structured approach.
Landlords are also preparing for future regulation, with 62% of respondents who hold properties with lower environmental ratings planning to carry out works in the future to meet requirements.
Despite this, landlords cited some challenges in the sector, reporting softer tenant demand. While demand stayed strong overall, 43% of landlords said they experienced void periods and 30% reported rental arrears in the last 12 months.
More landlords plan to invest in property, rising from 5% to 8% since the last quarter, but a significant share is still considering selling up, with 42% saying they expected to sell at least one rental property in the next year. Foundation said this could reflect pressures around cost and compliance.
Hendry said the remaining pressures should not be ignored, adding: “Softer tenant demand and rising voids show this is a more balanced market than in recent years, and some landlords will continue to reassess their position. However, the overall picture is one of a sector that is evolving rather than retreating.
“For brokers, this creates a significant opportunity. Landlords need support to navigate an increasingly complex landscape, whether that’s around portfolio structuring, refinancing or funding improvements. Specialist lenders and brokers therefore have a key role to play in ensuring landlords can continue to operate successfully and take advantage of the opportunities that still exist.”
