Research, carried out by Pegasus Insight on behalf of Paragon Bank, found that landlords who reported making a profit from their lettings activity in the first quarter of 2025 increased from 84% to 87% in the second.
In a Press Release, Paragon Bank stated this rise to be just “one-percentage point below the five-year high of 88% recorded in Q4 2020.”
The bank goes on to say, “It follows an increase of 10-percentage points in the two years since the same period in 2023, when the 77% reporting a profit was at a five-year low.”
Where there is growth, there’s also decline
Despite the fact that the proportion making a profit has grown since the first quarter of the year, there has been a decline, from 7% to 5%, in those who said that they made a loss.
Paragon also reports that during the same time period the proportion of landlords who broke even remained the same at 8%.
Tenant issues
Highlighting the impact that tenant issues can have on lettings businesses, Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said: “Profitability was lower amongst landlords who reported experiencing outstanding debts in the last 12 months (79%), those whose property was damaged (79%) and those who needed to evict a tenant (78%).
“It’s interesting to see that the data suggests there may be a link between profitability and harmonious relationships between responsible landlords and respectful tenants.
“This shows that it’s not always plain sailing for landlords. We know that they work hard and with the research also showing that, on average, they spend more than a fifth of their gross rental income running and maintaining their properties, the profits they make result from the time and money they put into providing good quality homes for renters.”
