Buy-to-let landlords are bringing in more rent than a year ago, but the headline figures hide a tougher reality: unpaid rent, higher costs and tighter regulation are still putting pressure on the sector.
On paper, the latest figures look like good news for landlords. Average gross rental income per property has reportedly risen by almost a quarter over the past year, increasing from around £9,860 to £12,117.
That is a significant jump and a clear sign that demand for rental homes remains strong across much of the UK.
But behind the bigger rental figures sits a more uncomfortable story. Around three in ten landlords are believed to have experienced rent arrears at some point over the last year. That means hundreds of thousands of landlords have had to deal with missed payments, delayed rent or tenants falling behind.
For landlords and letting agents, the message is clear: higher rents do not automatically mean a healthier portfolio.
Rising rent is only half the picture
The private rented sector is still being driven by strong demand and limited supply. In many areas, tenants are competing for a smaller pool of available homes, and that continues to support rent increases.
But landlords are not simply banking the extra income.
Mortgage payments remain much higher than they were for many investors only a few years ago. Insurance, repairs, letting costs, licensing fees, service charges and compliance work have all added to the pressure.
So while gross rental income may be up, actual profit can still be squeezed.
A landlord receiving an extra few hundred pounds a month in rent may also be paying considerably more in mortgage interest, maintenance and tax. That is why headline rent growth needs to be treated carefully. It does not tell the full story of landlord finances.
Arrears are becoming a serious warning sign
The most worrying part of the latest figures is the level of arrears.
If almost a third of landlords have faced arrears in the last year, that suggests tenant affordability is under strain. Many renters are dealing with higher household bills, food costs, borrowing costs and general living expenses.
For landlords, even one missed payment can create a problem. For smaller landlords with one or two properties, arrears can quickly affect their own ability to meet mortgage payments or cover essential repairs.
The risk is even greater where arrears build up over several months. A standard deposit may not come close to covering the total amount owed, particularly if legal costs, damage or void periods are also involved.
This is why tenant referencing, affordability checks and early arrears management are now more important than ever.
Landlords should not wait until arrears become unmanageable. Early contact, clear records and a structured repayment approach can make a major difference.
Strong rent growth does not remove risk
Some landlords may look at rising rental income and feel reassured. But the market is more fragile than it appears.
A higher rent only works if it is sustainable. If a rent increase pushes a tenant beyond what they can realistically afford, the risk of arrears increases. That can leave the landlord worse off than before.
There is a balance to strike. Landlords need fair market rent, but they also need reliable rent.
A slightly lower rent from a stable, long-term tenant may sometimes be better than chasing the highest possible figure and ending up with repeated arrears, complaints or void periods.
This is particularly important in the current climate, where tenants are under financial pressure and landlords face more rules around rent increases and possession.
Regional differences are becoming more obvious
The national picture does not tell the whole story.
Some parts of the UK have seen very strong rental income growth, particularly areas with high tenant demand and limited available stock. Other regions have performed less strongly, and some have seen falling portfolio values or weaker income growth.
This means landlords need to focus on local market conditions rather than national averages.
A landlord in the North West, West Midlands or parts of Wales may be seeing a very different market from a landlord in the South East, South West or North East.
The key question is not just whether rents are rising nationally. It is whether a specific property, in a specific location, is still producing a safe and sustainable return.
That means looking closely at local rent levels, tenant demand, arrears risk, mortgage costs, maintenance costs and likely future regulation.
The Renters’ Rights Act adds another layer of pressure
The rental market is also changing because of the Renters’ Rights Act.
With the end of Section 21 and major changes to tenancy rules, landlords will need to be more careful in how they manage properties, handle rent increases and deal with problem tenancies.
This does not mean landlords have no protection. But it does mean that paperwork, compliance and proper procedures matter more than ever.
Landlords who keep poor records, rely on informal arrangements or fail to follow the correct process may find themselves exposed.
For letting agents, this is likely to increase the value of professional management. Many landlords will need more support to stay compliant and protect their income.
For landlords managing properties themselves, it is a reminder that buy-to-let is no longer a passive investment. It is a regulated business and needs to be treated as one.
What landlords should do now
The latest figures should prompt landlords to review their portfolios carefully.
A property may still be bringing in good rent, but that does not automatically mean it is performing well. Landlords should look at the full picture: income, costs, arrears history, tenant stability, mortgage position and future risk.
It may also be sensible to review rent guarantee insurance, landlord insurance, referencing procedures and arrears policies.
Landlords should also check whether rents are realistic for the local market. Overpricing can increase void periods and affordability issues. Underpricing can reduce returns at a time when costs are rising.
The strongest position is a well-priced property, let to a properly referenced tenant, with clear records and a plan in place if payments are missed.
A tougher but still active market
The buy-to-let market is not dead. Far from it.
Rental demand remains strong, rents are still rising in many areas and property remains a major long-term investment for many landlords.
But the market has changed.
The easy gains of the past are harder to find. Landlords now need to manage cash flow, regulation, tenant affordability and local market risk much more carefully.
The latest rental income figures may look positive at first glance, but they should not lead to complacency. Rising rent is welcome, but secure rent is what really matters.
For landlords and letting agents, the lesson is simple: the strongest portfolios in 2026 will not just be the ones charging the highest rents. They will be the ones with the best systems, the best tenant checks and the clearest grip on risk.
Disclaimer: NetRent does not provide legal advice. This article reflects our understanding of rental property law and current market developments. Landlords should seek independent professional advice before making decisions about their property, tenancy or compliance obligations.
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