Purchase-to-let profitability has rebounded, with common rental yields matching their highest ranges in a decade, the Landlord Traits 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, stated: “Yields at a 10-year excessive are a transparent sign of the enduring power of the non-public rented sector.
“Regardless of the numerous challenges landlords have confronted over current years – from larger borrowing prices to shifting tax guidelines – the basics of tenant demand and revenue technology stay strong.
“The truth that nearly 9 in 10 landlords are nonetheless making a revenue demonstrates the sector’s skill to climate financial and coverage storms.
“On the identical time, the coverage panorama is much from settled. The Renters’ Rights Invoice represents essentially the most important set of modifications in a technology, and whereas meant to guard tenants, it’s also including to landlord uncertainty.
“Our knowledge reveals landlords stay dedicated, however for a lot of the approaching 12 months can be a vital interval to evaluate portfolios, financing and enterprise fashions in gentle of what’s forward.”
Profitability can be strong: 87% of landlords say they’re presently making a revenue, with 21% describing this as a ‘giant’ revenue and 66% a ‘small’ revenue.
Solely 5% report any type of loss.
The rebound comes in opposition to 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 lease improve limits, and new rights for tenants round pets and advance lease resulting from be applied from early 2026.
With solely 14% of landlords saying they’re absolutely conscious of the small print of the Invoice, the uncertainty is prone to affect portfolio methods within the months forward.
