Average landlord rental income increased by 22.9% over the past year, despite almost a third of landlords experiencing rent arrears, according to new research from LegalforLandlords.
The firm’s latest landlord trends analysis for Q1 2026 found that average gross rental income per property rose from £9,860 in Q1 2025 to £12,117 in Q1 2026.
LegalforLandlords estimates that around 30% of the UK’s 2.8 million landlords experienced arrears at some point during the past year, equivalent to approximately 846,000 landlords.
The research also found that the average landlord portfolio remains unchanged year on year at 7.3 properties, with an average portfolio value of £1.7m.
However, regional trends showed significant variation in both portfolio size and value.
The West Midlands recorded the largest increase in portfolio size, with landlords adding an average of 3.7 properties over the past year to reach 11.5 properties per portfolio. In contrast, landlords in Central London and the North East saw average portfolio sizes fall by 1.9 properties.
Portfolio values also shifted sharply across the UK. The West Midlands recorded the strongest annual growth, with average portfolio values increasing by 29.4% to £2.2m. The East of England and South East also saw double digit growth, rising by 28.6% and 15.8% respectively.
Meanwhile, the North West saw the largest fall in portfolio value, down 27.8%, followed by Yorkshire & Humber at 25% and the South West at 23.8%.
Rental income growth was strongest in the North West, where average income per property increased by 52.2% year on year. The West Midlands and Wales also recorded substantial increases of 49.2% and 45.3% respectively. The North East was the only region to record a decline, with rental income per property falling by 19.4%.
LegalforLandlords estimates the combined value of UK landlord portfolios has now reached £4.8tn.
Sim Sekhon, Group CEO at LegalforLandlords, said: “Landlords are operating in an increasingly complex market where headline performance figures only tell part of the story. While rental income growth reflects continued tenant demand and sustained pressure on supply, many landlords are simultaneously facing higher borrowing costs, rising compliance obligations, and a substantial risk of arrears.
“We are seeing a widening gap between portfolio growth and portfolio resilience. The landlords performing strongest are those taking a more strategic approach to managing risk, whether that’s through stronger tenant referencing, rent protection measures, or reviewing the long-term structure of their portfolios.
“The Renters’ Rights Act is also already influencing landlord behaviour. As the sector moves into a more regulated environment, particularly around possession reform and tenant protections, preventative measures such as affordability checks, early arrears intervention, and professional portfolio management are becoming increasingly important.”
