The study showed that 87% of landlords earned profits from their lettings, up from 84% in the previous quarter and just one percentage point below the five-year high recorded in late 2020

Nearly nine in 10 landlords in the UK reported making a profit in the second quarter of 2025, according to new research commissioned by specialist BTL lender Paragon Bank.

The study, conducted by Pegasus Insight, showed that 87% of landlords earned profits from their lettings, up from 84% in the previous quarter and just one percentage point below the five-year high recorded in late 2020.

The findings indicate a steady recovery from a five-year low in 2023, when only 77% of landlords reported profits. The proportion of landlords who said they made a loss declined from 7% to 5% between the first and second quarters of 2025, while the share of those breaking even remained unchanged at 8%.

It’s encouraging to see landlord profitability nearing a five-year high, with nearly nine in 10 reporting making a profit, said Louisa Sedgwick, managing director of mortgages at Paragon Bank. 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, she said.

Rising landlord profitability signals ongoing demand for BTL mortgages and more business opportunities for mortgage brokers. However, brokers should advise clients on managing tenant risks and property costs, as these factors impact landlord profits too.

The research found that profitability was lower among landlords who had encountered tenant-related issues in the past year. Landlords who experienced arrears, property damage, or tenant evictions reported profit rates of 79%, compared to the overall average.

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, Sedgwick said. This shows that it’s not always plain sailing for landlords.