Research from Foundation Home Loans suggests landlords are becoming more confident about the future of the private rented sector despite continued cost pressures and regulatory change.
The lender’s latest Landlord Trends research, conducted with Pegasus Insight, found that 84% of landlords said their lettings activity remained profitable in Q1 2026, underlining the resilience of the buy-to-let market even as operating conditions become more challenging.
Average rental yields also edged higher to 6.5%, while both rental income and portfolio values increased quarter-on-quarter.
The findings point to a sector continuing to adapt rather than retreat, with more landlords taking a structured, long-term approach to portfolio management.
ENERGY EFFICIENCY REGULATION
Confidence levels improved across all regions during the quarter, while the proportion of landlords intending to remain in the sector rose to 63%, up from 58% in Q4 2025. References to exiting the market also declined.
At the same time, the research highlighted ongoing refinancing activity, with 39% of landlords with borrowing planning to remortgage within the next 12 months. Portfolio sizes also continued to grow, with the average landlord now owning 7.3 properties.
Landlords are also preparing for future energy efficiency regulation, with 62% of those holding lower-rated EPC properties saying they intend to carry out improvement works.
However, challenges remain. Some 43% of landlords reported void periods over the last year, while 30% experienced rental arrears. Although investment intentions have improved slightly, 42% of landlords still plan to sell at least one property in the next 12 months.
STRONG FUNDAMENTALS
Grant Hendry (main picture, inset), Director of Sales at Foundation, says: “The latest data shows a landlord community and wider private rental sector that continues to prove its resilience.
“While landlords are clearly facing a range of challenges, from rising costs to regulatory change, the fundamentals remain strong. Profitability is holding up, yields are stable, and we’re seeing early signs that confidence is beginning to return.”
LONG-TERM APPROACH
And he adds: “What is particularly notable is the way in which landlords are adapting. Portfolio sizes are increasing, more investors are taking a structured, long-term approach, and there is clear evidence of landlords planning ahead, whether that is through refinancing activity or preparing for future EPC requirements.
“At the same time, we shouldn’t ignore the pressures that remain. Softer tenant demand and rising voids show this is a more balanced market than in recent years, and some landlords will continue to reassess their position. However, the overall picture is one of a sector that is evolving rather than retreating.”
