The latest data from Pegasus Insight tracking gross rental yields found the average was almost unchanged from 6.4% in Q4 2025.

Landlords of houses in multiple occupation (HMOs) continue to outperform, achieving an average gross yield of 7.6%.

The survey also revealed that 58% of landlords reported strong tenant demand.

Even though 84% of landlords reported that their lettings activity was profitable, this marks a second successive quarterly decline, down from 85% in Q4 and 89% in Q3 2025.

However, the proportion of loss-making landlords eased to 4% in Q1, down from 6% in Q4 2025.

At a regional level, the North West is generating the strongest returns, with average yields of 7.1%, while London-based landlords continue to achieve the lowest, at 5.3%, reflecting the capital’s higher property prices relative to rental income.

Separate research based on 3,000 interviews with private renters, found the average tenant has now been in their current property for an average of 5.3 years, a figure that has been gradually rising.

Two thirds say they plan to stay beyond their current agreement, intending to remain for a further 4.3 years on average.

Just 17% of tenants plan to leave their current property, with most citing personal circumstances such as relocating or upsizing rather than dissatisfaction with their tenancy.

Over two thirds rate their recent rental experience as positive.

Pegasus Insight founder and managing director Mark Long says: “The stabilisation of yields at 6.5% is a more encouraging signal than it might first appear.

“Coming after a period of gradual softening, it suggests the sector has found a degree of equilibrium, at least for now, even as regulatory complexity and cost pressures continue to intensify.

“What the data consistently shows is that profitability is increasingly a function of portfolio structure.

“HMO landlords, those with larger portfolios and those operating through limited company structures continue to demonstrate greater resilience, while more traditionally structured portfolios have less of a buffer as costs remain elevated.

“The tenant picture provides genuinely important context here.

“Long tenures, strong satisfaction scores among those with direct landlord relationships, and continued intention to stay all point to an occupancy base that is far more stable than the regulatory debate might suggest.

“For lenders and investors, that underlying stability is a fundamental part of the investment case for buy-to-let.

“The challenge for the sector is translating that structural stability into sustained confidence.

“With landlord sentiment still subdued and divestment continuing to outpace acquisition, supply remains under pressure.

“How the market responds once the Renters’ Rights Act beds in will be the defining question for the year ahead.”