"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"
- Louisa Sedgwick - Paragon Bank
Research for Paragon Bank reveals that nearly nine in ten landlords are reporting profits, reaching levels not seen in almost five years.
Data from Pegasus Insight, commissioned by Paragon Bank, shows that the proportion of landlords making a profit from their lettings rose from 84% in Q1 2025 to 87% in Q2. This figure is just one percentage point below the five-year high of 88% recorded in Q4 2020. It also reflects a 10-percentage point increase since Q2 2023, when only 77% reported a profit, marking a five-year low.
While profit rates have increased, the proportion of landlords making a loss fell from 7% to 5%, and the share breaking even stayed at 8%.
Louisa Sedgwick, managing director of mortgages at Paragon Bank (pictured), said, “It’s encouraging to see landlord profitability nearing a five-year high, with nearly nine in ten 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.”
The research also shows that tenant-related issues can impact profitability. Landlords who reported arrears in the past 12 months saw profit rates of 79%, the same percentage applied to those whose property was damaged. Profitability was slightly lower at 78% for landlords who had to evict a tenant.
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.”
