In a surge not seen since the first quarter of 2022, landlord profitability reached new highs in Q3 of this year, according to the latest research from Paragon Bank. Findings show that 87% of landlords reported profitable returns during this period, underscoring a robust trend that has been climbing steadily over the past year.
This survey, conducted by Pegasus Insight on behalf of Paragon Bank, included over 700 landlords across the UK. Results indicate a seven-percentage-point rise in profitability compared to Q3 of 2023. Breaking down the figures, 17% of landlords recorded substantial profits, while 70% reported smaller gains. Only 4% of landlords reported losses this quarter, a reduction from 6% in Q2 and 8% in the same quarter last year. The remaining 9% of landlords reported breaking even.
Regionally, landlords in the East of England led the way, with 90% reporting profitable returns. Landlords in the South West and East Midlands also reported higher-than-average profitability, with 89% and 88% respectively indicating positive returns.
Profitability also varied based on tenant type. Landlords renting to students reported the highest profitability, with 91% making a profit. Family renters followed closely at 88%, with couples also proving a reliable tenant group at 87%.
A spokesperson for Paragon Bank noted that, despite rising operational costs over the past two years, landlords have shown resilience. “These findings support our belief that many landlords have managed their businesses with insight and agility, resulting in strong profitability. Key factors include robust demand for rental properties amid an improving economic landscape and easing inflation pressures,” the spokesperson said.
The report signals promising trends in the rental sector, reflecting both strategic management among landlords and strengthening economic conditions across the UK.