Most landlords are still making money from buy-to-let despite heavier regulation, rising costs and softer tenant demand, with new research putting profitability at 84 percent in the first quarter of 2026.
The headline comes from Foundation Home Loans research conducted with Pegasus Insight. It points to a market that is under pressure but still producing workable returns for a large majority of professional landlords, which matters more than broad claims that the sector is either booming or collapsing.
What the latest landlord trends data shows
Pegasus Insight’s Landlord Trends programme tracks private landlord sentiment each quarter, and the latest figures reported by Foundation Home Loans show 84 percent of landlords remained profitable in Q1. Average rental yields were put at 6.5 percent, while rental income and portfolio values both rose over the quarter.
Confidence also improved. The share of landlords planning to remain in the sector rose to 63 percent from 58 percent in the final quarter of 2025. That does not mean confidence is back to where it was before the latest reform cycle, but it does suggest the first phase of adjustment after the Renters’ Rights Act has not pushed landlords into a wholesale retreat.
Why the numbers need a closer read
The more useful part of the data is not the 84 percent figure on its own. It is the mix underneath it. Around 39 percent of landlords plan to remortgage within the next 12 months, 43 percent reported void periods in the past year and 30 percent said they had faced rental arrears.
That is not a picture of an easy market. It is a picture of a market where landlords can still make money, but only if they manage debt, voids and compliance more tightly than before. The survey also found 61 percent expect to raise rents in the next 12 months by an average of 5.7 percent, which suggests cost pressure is still feeding through to tenants.
This follows Landlord Knowledge’s May report on landlord yields hitting 6.5 percent while RRA fears dragged on confidence, which showed returns remained intact even as reform risk kept sentiment subdued. It also builds on our earlier coverage of portfolio landlords carrying more debt exposure, which helps explain why remortgaging plans are such an important signal in this quarter’s data.
Professional landlords are adjusting rather than disappearing
The data points towards adaptation rather than surrender. Average portfolio sizes were reported at 7.3 properties, and the direction of travel is towards more deliberate, professional ownership rather than casual letting. That does not remove the risk of exits, but it does suggest the landlords staying in the market are becoming more selective and more operationally focused.
For property investors, the warning is simple: profitability is still achievable, but it is less forgiving. A decent gross yield means less if remortgaging costs rise, void periods stretch or EPC works land at the wrong point in the cashflow cycle.
What this means for landlords
- If you are reviewing performance this quarter: compare your own yields against the 6.5 percent benchmark, but factor in voids, arrears and refinance costs rather than headline rent alone.
- If you are remortgaging in the next year: start early because refinancing intentions are already high and lender criteria can shift quickly.
- Watch for: whether improving confidence holds up once higher compliance costs and EPC upgrade planning feed deeper into 2026 budgets.
- Bottom line: the market still works for many landlords, but profits now depend more on execution than momentum.
Editor’s view
The sector is not in rude health, but it is not falling apart either. The stronger reading is that buy-to-let is becoming less forgiving and more professional, which suits disciplined landlords but squeezes anyone relying on old margins and light-touch management.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 8 May 2026
Sources: Foundation Home Loans, Pegasus Insight
Related reading: Landlord yields hit 6.5% but RRA fears drag on confidence
