According to research carried out by Pegasus Insight on behalf of Paragon, the proportion of landlords who reported making a profit from their lettings activity rose from 84% in the first quarter of 2025 to 87% in the second.
This is just below the 8% high reported in Q4 2020 and is a 10% increase on Q4 2023, when only 77% of landlords reported a profit – a five-year low.
The report found that while there has been a growth in landlords reporting a profit, there has also been a fall in those reporting a loss – from 7% to 5%.
The proportion of landlords who broke even has stayed the same at 8%.
Profitability was lower among landlords who reported experiencing arrears in the last 12 months and those whose property was damaged – coming to 79% for both – with 78% saying profitability was impacted due to having to evict a tenant.
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Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “It’s encouraging to see landlord profitability nearing a five-year high, with nearly nine in 10 reporting making a profit. This chimes with recent analysis of our own lending data, which revealed that yields – a key determinant of profit – remained at almost their highest levels in over a decade.
“As well as reflecting the resilience of the sector, these findings highlight how continued demand for good-quality, flexible housing means that buy-to-let property remains an attractive asset for landlords.”
Sedgwick added: “It’s interesting to see that the data suggests there may be a link between profitability and harmonious relationships between responsible landlords and respectful tenants.
“This shows that it’s not always plain sailing for landlords. We know that they work hard and with the research also showing that, on average, they spend more than a fifth of their gross rental income running and maintaining their properties, the profits they make result from the time and money they put into providing good-quality homes for renters.”
