Quick Summary
The UK buy-to-let sector is showing strong income resilience, with Paragon Bank data reporting average gross yields of 7.02%, improved landlord profitability, and the lowest rent arrears level on record.
• Buy-to-let yields remain strong: Average gross rental yields reached 7.02% in Q2 2026, reinforcing the income case for UK rental property investment
• Landlord arrears have fallen: The share of landlords reporting rent arrears over the previous 12 months fell by 14%, reaching the lowest level recorded in Paragon Bank’s Landlord Trends survey
• Profitability is improving: 86% of landlords said they were making a profit from lettings activity, up two percentage points from the previous quarter
• BTL credit performance remains resilient: Buy-to-let arrears have remained lower than owner-occupier arrears in 25 of the past 26 years
• Professional investors gain confidence: Reliable rental income, strong yields, and improved portfolio performance support continued allocation to well-managed UK buy-to-let assets
New data from Paragon Bank confirms the structural resilience of the UK buy-to-let sector. In the second quarter of 2026, average gross rental yields reached 7.02%. At the same time, there was a fall of 14% in landlords who reported experiencing rent arrears over the previous 12 months, the lowest level recorded in the bank’s long-running Landlord Trends survey.
Profitability also improved. Some 86% of landlords stated they were making a profit from their lettings activity, up two percentage points on the prior quarter.
The findings are consistent with the sector’s long-term credit performance. Buy-to-let arrears have remained lower than those in the owner-occupier market in 25 of the past 26 years.
Lisa Steele, Mortgage Lending Director at Paragon Bank, emphasised that the majority of tenancies continue to operate effectively. She noted that reliable rental income and profitable operations remain the typical experience for landlords, even amid wider economic and regulatory pressures.
Landlord sentiment reflects this distinction. While overall confidence remains measured, respondents expressed greater assurance in the performance of their own portfolios and rental yields than in external factors such as the wider economy or future capital values.
The data provide clear evidence that income reliability and profitability are enduring features of the UK buy-to-let sector. For professional investors, these metrics reinforce the case for continued allocation to well-managed rental assets.