Despite new regulations on the horizon, the UK rental market is showing significant strength, with average rental yields reaching a 10-year peak of 6.5% in the second quarter of 2025. This promising data comes from the latest Landlord Trends report by Pegasus Insight.

The report also shows that profitability is robust, with 87% of landlords currently making a profit.

• Regional Hotspots: Landlords in the North West, North East, and East Midlands are seeing the best returns, with all three regions averaging above 7%. London yields remain the lowest at 6.1%.

This positive trend demonstrates the sector’s resilience in the face of economic challenges and policy changes. According to Bethan Cooke, director at Pegasus Insight, the strong tenant demand and income generation continue to be the backbone of the private rented sector.

Navigating a Changing Landscape

While the numbers are strong, the policy landscape is evolving. The Renters’ Rights Bill is expected to become law by the end of September. The report reveals that only 14% of landlords are fully aware of the Bill’s details, and this uncertainty is likely to impact portfolio strategies in the coming months.

The next year will be a crucial period for landlords to review their portfolios, financing, and business models to prepare for these significant changes.