While most landlords are making good profits on their portfolios, with increased yields, the Renters’ Rights Act is causing concern for some landlords, Aldermore reveals.

Aldermore data, gathered in conjunction with Pegasus Insight, found that the Renters’ Rights Act, which passed into law on 1 May, is causing concern for landlords with smaller portfolios, with their expectations for future lettings business dropping.

It shows that five out of every six landlords (84%) report their lettings activity being profitable.

Unencumbered landlords are likelier to report a profit than those who borrow (90% vs. 77%), and larger portfolio landlords are also more likely to report higher levels of profit.

The average achieved yield is 6.5%, up slightly since last quarter.

Elsewhere, research shows that the share of landlords reporting strong tenant demand continues to decline.

While 58% still classify demand as strong in Q1 2026, this is down from 61% in Q4 2025, and down from 73% compared with Q1 last year.

Since Q1 2024, when 83% considered tenant demand as strong, that figure has fallen every single quarter in a row.

Increasingly, more landlords are reporting demand as average, with a smaller increase reporting demand as weak.

Landlords’ expectations for their overall lettings business have fallen to their lowest level since Q2 2023, nearly three years ago.

It found that 27% of landlords felt positive in Q1 2026, whereas throughout the prior two years, the percentage of landlords feeling positive hovered in the mid-30s.

On the Renters’ Rights Act, only 8% of landlords think the new legislation with positively impact their portfolios.

Meanwhile, 16% expect no impact, with 70% expecting an overall negative effect and 5% unsure.

In addition, nine in 10 landlords are also concerned about potential backlogs in the court system for evicting tenants.

Aldermore director of mortgages Jon Cooper says: “Generally speaking, we’re seeing that the more professional and sophisticated landlords are navigating the changing market with greater confidence, whereas part-time landlords with smaller portfolios can struggle to adapt.”

Cooper is cognisant of the challenges facing landlords but sees an opportunity for brokers to step up and play a more strategic role as clients navigate an evolving sector.

He adds: “The conditions may feel more complex than in previous years, but that is exactly when strong partnerships matter most.”

“Landlords are not stepping away from the sector in large numbers. Instead, they are becoming more selective and more strategic. For brokers, this creates a clear opportunity to step in as a steadying influence, helping clients interpret change and make informed decisions.”