PRS shows resilience in Q2 with £18m average portfolio

The PRS showed signs of resilience in the second quarter with an average portfolio size of £1.8m.

Foundation’s analysis of the latest Pegasus Insights landlord trends report found gross rental income averaged at £12,007 per property in this period with average rental yields of 6.4%.

The research found stark regional differences, however.

Central London landlords reported the highest average portfolio value at £3.7m and the highest rental income per property at £17,989. However, yields were lower than the national average at 5.3%.

Outside London, several regions continue to deliver stronger yields. The East of England and East Midlands both recorded average rental yields of 7.3%, the highest in the UK, followed by Yorkshire and The Humber at 6.8%, the North East at 6.6%, and both the South West and West Midlands at 6.5%.

Profitability remains robust across much of the country.

The East Midlands recorded the highest proportion of landlords making a profit at 92%, followed by the West Midlands at 90%. The East of England and South West both stood at 89%, while the South East reported profitability levels of 87%.

Encouragingly, 86% of landlords said they were making a profit from their lettings activity, while only 5% reported operating at a loss. Over the past 12 months, 22% of landlords sold a property compared to just 6% who purchased one, suggesting many are reviewing and reshaping their portfolios in response to changing market conditions.

However, the research revealed that stronger yields could still be accompanied by significant operational challenges.

The North East — which recorded one of the UK's highest average rental yields at 6.6% — also reported the highest proportion of landlords experiencing void periods at 55%, alongside rental arrears affecting 42% of landlords.

Similarly, rental arrears were reported by 43% of landlords in Yorkshire and The Humber, 39% in the North West and 37% in the East Midlands. These were all significantly above the UK average of 26%.

"The latest research reinforces the fact there is no such thing as a typical BTL market,” said Grant Hendry, director of sales at Foundation (pictured above).

"For brokers, understanding these local market dynamics has never been more important.

“The most effective advice goes beyond simply comparing rates and products — it involves helping landlords assess their long-term objectives, refinancing requirements, acquisition plans and portfolio strategy.

“By understanding the regional picture, brokers can better support clients in identifying the most appropriate opportunities and solutions, ultimately making mortgages happen.”