Average rental yields for buy-to-let (BTL) landlords have returned to their strongest levels in a decade, according to research from Pegasus Insight.
The Landlord Trends report for Q2 2025 found the average yield stood at 6.5%, matching the 10-year peak last reached in Q3 2024.
Landlords in the North West, North East and East Midlands reported the highest returns, each with yields above 7%.
London continued to see the lowest yields at 6.1%.
Pegasus Insight found 87% of landlords said they were making a profit, with 21% describing this as a large profit and 66% as a small profit.
Only 5% reported any kind of loss.
Bethan Cooke (pictured), director at Pegasus Insight, said: “Yields at a 10-year high are a clear signal of the enduring strength of the private rented sector.
“Despite the significant challenges landlords have faced over recent years – from higher borrowing costs to shifting tax rules – the fundamentals of tenant demand and income generation remain robust.
“The fact that almost nine in 10 landlords are still making a profit demonstrates the sector’s ability to weather economic and policy storms.”
Cooke added: “At the same time, the policy landscape is far from settled. The Renters’ Rights Bill represents the most significant set of changes in a generation, and while intended to protect tenants, it is also adding to landlord uncertainty.
“Our data shows landlords remain committed, but for many the coming 12 months will be a crucial period to review portfolios, financing and business models in light of what’s ahead.”
