Landlords saw profits and yields rise, despite ongoing market challenges, research commissioned by Aldermore found.
The data, carried out by Pegasus Insight, showed 89% of landlords made a profit from their lettings, the highest figure since 2019.
The average yield achieved was 6.6%, the best seen in a decade.
Landlords with property in the North West (7.4%) and Yorkshire and the Humber (7.2%) secured the highest rental yields.
Nearly seven in 10 landlords (68%) used a broker to manage their properties.
Landlord confidence fell compared to the same time last year.
Expectations for yields and capital gains dropped by 3% and 4% respectively.
Only 2% of landlords said they felt confident about the UK’s economic prospects, compared to 3% last year.
Jon Cooper, director of mortgages at Aldermore, said: “The numbers here paint an interesting picture, one that might seem contradictory at first glance.
“Whilst the average landlord is seemingly doing the best since pre-pandemic days when it comes to profits and yields, what’s increasingly obvious is that many landlords still feel jittery about what the next few years will bring.”
Nearly three-quarters of landlords (73%) feared the Renters Rights Bill would have a negative impact on their lettings, and 88% were concerned about the introduction of the legislation.
More than nine in 10 landlords (92%) said they were worried about a possible 8% national insurance tax on rental income, which some speculated could be announced in the Chancellor’s Autumn Budget in November.
Cooper added: “There’s work to be done to ensure the private rental sector remains a viable environment for both renters and landlords, and regulation must be implemented in a way that is fair, proportionate, and meaningful for all parties.
“At Aldermore we know that many landlords are concerned about unintended consequences of the Bill.
“That being said, there may be potential benefits for the countless good landlords operating in the market.”
He said: “Many of the measures could boost trust and satisfaction among tenants, leading to longer tenancies, fewer void periods and fewer rent arrears.
“Upgrading properties could also mean higher property values.
“Landlords are experts at overcoming regulatory hurdles and I’m confident they will adapt their strategy, knuckle down and thrive under the new rules.”
