Purchase-to-let profitability has rebounded, with common rental yields matching their highest ranges in a decade, the Landlord Tendencies report (Q2 2025) from Pegasus Perception has discovered.
Yields common at 6.5%, whereas they’re over 7% within the North West, North East and East Midlands.
London yields are the bottom, at 6.1%.
Bethan Cooke, director at Pegasus Perception, mentioned: “Yields at a 10-year excessive are a transparent sign of the enduring energy of the non-public rented sector.
“Regardless of the numerous challenges landlords have confronted over latest years – from increased borrowing prices to shifting tax guidelines – the basics of tenant demand and revenue technology stay strong.
“The truth that virtually 9 in 10 landlords are nonetheless making a revenue demonstrates the sector’s means to climate financial and coverage storms.
“On the similar time, the coverage panorama is way from settled. The Renters’ Rights Invoice represents essentially the most important set of modifications in a technology, and whereas meant to guard tenants, additionally it is including to landlord uncertainty.
“Our information reveals landlords stay dedicated, however for a lot of the approaching 12 months shall be a vital interval to evaluation portfolios, financing and enterprise fashions in mild of what’s forward.”
Profitability can also be strong: 87% of landlords say they’re presently making a revenue, with 21% describing this as a ‘massive’ revenue and 66% a ‘small’ revenue.
Solely 5% report any type of loss.
The rebound comes towards a backdrop of looming legislative change.
The Renters’ Rights Invoice is anticipated to obtain Royal Assent earlier than the top of September, with preliminary measures such because the abolition of Part 21 ‘no-fault’ evictions, the shift to open-ended tenancies, annual hire improve limits, and new rights for tenants round pets and advance hire attributable to be carried out from early 2026.
With solely 14% of landlords saying they’re totally conscious of the main points of the Invoice, the uncertainty is more likely to affect portfolio methods within the months forward.
