84% of UK Landlords Profitable in 2026: What This Means for Your Mortgage

As of May 2026, the majority of landlords in the UK are still turning a profit, with 84% reporting profitability, according to the latest Landlord Trends research from Foundation. This comes amid average rental yields of 6.5% and increasing portfolio values and rental income. However, the landscape is not without its challenges, with 42% of landlords considering selling at least one rental property in the next year.

Landlord Profitability and Rental Yields

The latest data, conducted in partnership with Pegasus Insight, shows that despite the current base rate of 3.75%, landlords are still managing to maintain profitability. The average rental yield has edged up to 6.5%, suggesting a healthy return on investment for landlords. For context, this is an increase from the 5.8% yield reported six months ago.

Scenario: Landlord with a £200,000 Buy-to-Let Mortgage

Consider a landlord with a £200,000 interest-only buy-to-let mortgage. With a rental yield of 6.5%, they would receive an annual income of £13,000 from their property. Even after deducting mortgage interest payments, which at the current base rate of 3.75% would amount to £7,500 per year, they would still be left with a profit of £5,500.

Scenario: Landlord with a Portfolio of 7.3 Properties

The data also reveals that the average portfolio size has increased to 7.3 properties. This indicates a shift towards more structured, portfolio-based investment. For a landlord with 7 properties, each valued at £200,000, the total annual rental income would be £91,000. Even after mortgage interest payments of £52,500, the landlord would still make a profit of £38,500.

Landlord Challenges and Future Expectations

Despite the profitability, landlords face challenges. 43% reported experiencing void periods and 30% reported rental arrears over the last 12 months. Additionally, 42% plan to sell at least one rental property in the next year. However, 62% of landlords with lower-rated EPC properties plan to carry out works to meet future requirements, suggesting a willingness to invest in property stock and maintain long-term viability.

Projected Rent Increases

Around 61% of landlords expect to increase rents over the next 12 months, with an average projected rise of 5.7%. This is likely a response to the current base rate of 3.75%, which is higher than the 3.25% reported six months ago. This could potentially increase rental income and profitability for landlords.

Remortgaging Plans

Nearly four in 10 landlords with borrowing (39%) are planning to remortgage in the next year. This aligns with the current mortgage rates and could potentially lower their monthly payments, further boosting profitability.

Frequently Asked Questions

What is the average rental yield for landlords?

The average rental yield for landlords is currently 6.5%, an increase from the 5.8% reported six months ago.

What percentage of landlords are currently profitable?

According to the latest data from Foundation, 84% of landlords in the UK are currently profitable.

What percentage of landlords plan to increase rents in the next 12 months?

About 61% of landlords plan to increase rents over the next 12 months, with an average projected rise of 5.7%.

What percentage of landlords are planning to remortgage in the next year?

Approximately 39% of landlords with borrowing are planning to remortgage in the next year, potentially taking advantage of competitive mortgage rates.