Nearly nine in 10 landlords (87%) reported making a profit in the second quarter of 2025, according to research by Pegasus Insight for Paragon Bank, just one percentage point below the five-year high of 88% recorded in late 2020.
The figure is up from 84% in the first quarter and marks a 10 percentage point increase compared with the same period in 2023, when profitability hit a five-year low of 77%.
The proportion of landlords making a loss fell from 7% in Q1 to 5% in Q2, while those breaking even remained steady at 8%.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “It’s encouraging to see landlord profitability nearing a five-year high, with nearly nine in ten reporting making a profit.
“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.
“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.”
Profitability was notably lower among landlords who had faced tenant-related issues in the past 12 months, with 79% of those reporting arrears or property damage, and 78% of those who had needed to evict a tenant, making a profit.
Sedgwick added: “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.
“This shows that it’s not always plain sailing for landlords.
“We know that they work hard and with the research also showing that, on average, they spend more than a fifth of their gross rental income running and maintaining their properties, the profits they make result from the time and money they put into providing good quality homes for renters.”
