Landlord confidence is reportedly growing as the number of landlords experiencing rent arrears has reached a record low. Research by Paragon Bank indicates that 26% of landlords reported experiencing rent arrears during the past 12 months in the second quarter of 2026.
This figure represents a four percentage point decrease from 30% in the first quarter of the year. The bank also noted that the buy-to-let sector continues to show resilience despite ongoing market uncertainty.
Alongside the record-low arrears, 86% of landlords reported making a profit from their lettings activity, a two percentage point rise from the previous quarter. Paragon’s analysis also found that average gross rental yields reached 7.02% in Q2 2026.
Lisa Steele, mortgage lending director at Paragon Bank, stated that the majority of tenancies work well and provide reliable income for landlords. She highlighted that record-low arrears, strong profitability, and healthy rental yields are indicators of a resilient sector.
Separately, UK Finance reported that buy-to-let mortgages in three months or more arrears have declined for nine consecutive quarters. At the end of Q2, these accounted for 0.52% of outstanding buy-to-let mortgages, down from 0.68% at the same time last year.