Average landlord rental income has surged by almost a quarter over the past year despite mounting arrears pressures and growing regulatory costs across the private rented sector, research from LegalforLandlords reveals.
The data shows average gross rental income per property increased by 22.9% year-on-year, rising from £9,860 in Q1 2025 to £12,117 in Q1 2026, underlining the continuing imbalance between tenant demand and rental supply.
At the same time, landlord portfolios across the UK are now estimated to be worth a combined £4.8 trillion, with the average portfolio valued at £1.7m and consisting of 7.3 properties.
However, the figures also highlight growing financial strain beneath the headline growth. LegalforLandlords estimates around 30% of landlords experienced rent arrears over the last year – equivalent to approximately 846,000 landlords nationwide.
POSSESSION RULES
The findings come as landlords continue grappling with higher mortgage costs, tougher compliance rules and the ongoing rollout of the Renters’ Rights Act, which has already reshaped possession rules and increased regulatory obligations across the sector.
Regional performance varied sharply. The West Midlands recorded the strongest portfolio growth, with average portfolio values rising 29.4% to £2.2m, while landlords in the region added an average of 3.7 properties to their holdings.
The East of England and South East also recorded strong portfolio value growth, while landlords in Central London and the North East reduced portfolio sizes most significantly.
Rental income growth was strongest in the North West, where average income per property jumped 52.2%, followed by the West Midlands and Wales. The North East was the only region to record a fall in rental income.
GROWING COSTS
The data reflects a sector increasingly shaped by regional market dynamics rather than broad national trends, with investors adapting strategies around affordability pressures, local yields and regulatory change.
Industry bodies including the National Residential Landlords Association have repeatedly warned that growing costs and legislative pressure risk accelerating landlord exits and worsening supply shortages.
RENTERS’ RIGHTS ACT
Sim Sekhon (main picture, inset), Group CEO at LegalforLandlords, says: “Landlords are operating in an increasingly complex market where headline performance figures only tell part of the story.
“While rental income growth reflects continued tenant demand and sustained pressure on supply, many landlords are simultaneously facing higher borrowing costs, rising compliance obligations, and a substantial risk of arrears.
“We are seeing a widening gap between portfolio growth and portfolio resilience.”
He adds: “The Renters’ Rights Act is also already influencing landlord behaviour. As the sector moves into a more regulated environment, preventative measures such as affordability checks, early arrears intervention, and professional portfolio management are becoming increasingly important.”
