Lowest proportion recorded bt Pegasus trends report
The number of landlords experiencing rent arrears in the last 12 months has fallen to a record low in the second quarter of 2026, down 4 percentage points to 26% from the first quarter. It marks the lowest proportion recorded by the Landlord Trends report, conducted by Pegasus Insight on behalf of Paragon Bank.
Meanwhile, the number of those making a profit on their lettings also rose, up two percentage points to 86% compared to the previous quarter. Average gross rental yields reached 7.02%.
Recent figures from UK Finance show a similar picture, with three months plus arrears on buy-to-let mortgages down for nine consecutive quarters and representing 0.52% of outstanding mortgages at the end of the second quarter, down from 0.68% a year previously.
In buy-to-let, three months plus arrears have been lower in buy-to-let than owner-occupied in all but one of the past 26 years.
A reliable income for landlords
Lisa Steele, mortgage lending director at Paragon Bank, said: “We often hear about the pressures facing landlords, whether that’s economic uncertainty, regulatory change or the wider costs associated with running and maintaining properties. What’s sometimes overlooked is that the overwhelming majority of tenancies work well and continue to provide reliable income for landlords.
“Record-low arrears, strong levels of profitability and healthy rental yields are all signs of a sector that continues to demonstrate resilience despite a challenging backdrop.”
The survey also showed that while landlords are cautious about factors such as the wider economy and future market conditions, they are more positive about the performance of their own portfolios.
“Most tenants continue to meet their rental commitments, most landlords report operating profitable businesses and those are the factors that have the greatest influence on day-to-day confidence,” she said.
