New regulations may be adding to the administrative burden of being a landlord but yields may be on the rise again.

The latest Landlord Trends report for the second quarter of 2025 by Pegasus Insight shows that the average rental yield stands at 6.5%, equal to the 10-year peak reached in Q3 2024.

Regionally, landlords in the North West, North East and East Midlands report the strongest returns, all averaging above 7%, while yields in London remain lowest at 6.1%.

Profitability is also robust: 87% of landlords say they are currently making a profit, with 21% describing this as a ‘large’ profit and 66% a ‘small’ profit. Only 5% report any form of loss. 

It comes as the Renters’ Rights Bill is expected to receive Royal Assent before the end of September.

With only 14% of landlords saying they are fully aware of the details of the Bill, the uncertainty is likely to influence portfolio strategies in the months ahead.

Bethan Cooke, director at Pegasus Insight, said: “Yields at a 10-year high are a clear signal of the enduring strength of the private rented sector. Despite the significant challenges landlords have faced over recent years – from higher borrowing costs to shifting tax rules – the fundamentals of tenant demand and income generation remain robust. The fact that almost nine in 10 landlords are still making a profit demonstrates the sector’s ability to weather economic and policy storms.”

“At the same time, the policy landscape is far from settled. The Renters’ Rights Bill represents the most significant set of changes in a generation, and while intended to protect tenants, it is also adding to landlord uncertainty. Our data shows landlords remain committed, but for many the coming 12 months will be a crucial period to review portfolios, financing and business models in light of what’s ahead.”