UK landlord profitability is now at a six-year high, with rental yields setting a new record, according to research from Pegasus Insight.

Found that nearly nine in ten landlords (89%) now report making a profit from their lettings activity, the highest level recorded since 2019.

Of these, 17% say they are making a large profit, while a further 72% report a small profit. Just 7% say they are breaking even, and only a small minority report any form of loss.

The improvement in profitability is being supported by a continued rise in rental yields. In Q3 2025, the average achieved gross rental yield reached 6.6%, surpassing the previous 10-year high of 6.3% recorded in Q3 last year.

Landlords operating in the North West (7.4%) and Yorkshire and the Humber (7.2%) continue to deliver the strongest returns.

While landlord finances are improving, the research also shows a softening in forward-looking sentiment.

Expectations for future yields and capital gains both dipped quarter on quarter, down 3% and 4% respectively, reflecting ongoing caution of further economic and regulatory change.

Pegasus Insight managing director Mark Long said: “What really stands out in the Q3 data is the gap between how landlords are performing today and how they feel about the future.

“On the hard numbers, profitability and yields are the strongest we’ve seen for years, which is a clear sign of resilience in the sector.

“At the same time, confidence indicators have edged lower, which tells us landlords are remaining cautious rather than complacent. Many are choosing to consolidate, focus on cash flow and manage their portfolios carefully, sensible behaviour in an environment where policy and cost pressures remain front of mind.”