Stable tenancies and strong tenant demand are pushing landlord incomes to new heights, with fresh data showing record earnings for the second year running.
Figures from Pegasus Insight's quarterly Landlord Trends survey put average annual rental income at £89,000.
While most small landlords won't earn anywhere near that figure, it is a rise of £14,000 in a single quarter and £16,000 higher than 12 months ago.
The research shows income fell in the final quarter of 2025 before rebounding sharply to more than 20% above its level a year earlier.
Renter stability is valuable
Mark Long, the firm's founder and managing director, said: "Much of the debate around the PRS focuses on regulation, taxation and the challenges facing landlords, but these findings are a reminder that the market's underlying fundamentals remain strong."
He added: "The increase in rental income is significant, but what is perhaps more important is the quality of that income.
"Our Tenant Trends research shows that tenants are staying in their homes for longer, are generally satisfied with their rental experience and have little intention of moving.
"Long-term tenants provide landlords with stable, predictable income streams and reduce the costs and disruption associated with frequent tenant turnover.
"That stability is valuable for landlords and beneficial for tenants too."
Tenants want to stay
Separate Pegasus tenant research found the average renter has stayed with their current landlord for more than five years.
Two-thirds say they plan to remain, while more than two-thirds describe their renting experience as positive.
Satisfaction with landlord or letting agent service stands at 76% and the average landlord portfolio is now valued at £1.69 million.
Zoopla highlights falling supply
However, the image of sector resilience comes as a more complicated supply story has emerged from Zoopla's latest Rental Market Report, published this week.
Rents in areas where monthly costs sit below £750 are rising at 5%, that's more than twice the national average of 2.1%.
This is happening as overall earnings growth has outpaced rental inflation for a third consecutive year.
Also, every UK region and country has between 20% and 30% fewer homes available to rent than before the pandemic. The research also highlights that landlords are restricting their investment which is putting pressure on supply.
Richard Donnell, executive director at Zoopla, said: "We're seeing a split in how different regions and cities are responding to changes in the supply and demand for rented homes.
"Our latest report shows just how fast the gap in rents is closing between more affordable regions and major cities where rents are highest."
Landlord investment location
Simon Thompson, the managing director of Accommodation for Students, said: "Rising rents in cheaper areas suggest a landlord's property's location now matters more than it has for years.
"It also appears that tenant stability is an increasingly important asset right now which cuts void costs and delivers predictable cashflow."
He added: "There is also an issue with Zoopla saying that supply constraints across every UK region mean competition for available homes remains.
"And while new investment simply isn't keeping pace with demand, the fundamentals of the private rented sector underpinning returns look considerably more durable than much of the current political debate would suggest."
