A new poll of landlords has found that 87% make a profit on their properties despite spending a fifth of their gross rental income on property repairs and maintenance and also facing rent arrears and eviction costs.
The figures come from lender Paragon Bank, which commissioned Pegasus Insight to find out whether higher mortgage and other costs have been bearing down on the private rented sector.
It found that the proportion of landlords who reported making a profit from their lettings activity increased from 84% in the first quarter of 2025 to 87% in the second.
This is just one-percentage point below the five-year high of 88% recorded five years ago and follows an increase of 10-percentage points in the two years since the same period in 2023, when the 77% reporting a profit was at a five-year low.
But the lender’s figures also reveal the pain many landlords feel when tenancies go wrong.
Profitability was lower amongst landlords who reported rent arrears during the past 12 months (79%); whose property was damaged (79%); and those who needed to evict a tenant (78%).
“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”, says Louisa Sedgwick, MD of Mortgages at Paragon Bank (main image).
Paragon doesn’t reveal why it thinks profitability has increased, but the most obvious reason is higher rents which, the latest HomeLet rental index shows, have been climbing over the past 12 months in seven out of England’s nine regions, including by 2.3% in the NW of England and West Midlands.
“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,” says Sedgwick.
“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.”
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