Landlord rental income has risen sharply over the past year despite hundreds of thousands of property owners continuing to face rent arrears, according to new market analysis from LegalforLandlords.
Fresh Q1 2026 landlord trends 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.
The figures also show the average UK landlord portfolio is now worth around £1.7m, with landlords owning an average of 7.3 properties. While both figures remain broadly unchanged nationally compared with a year ago, regional trends show significant movement beneath the surface.
The West Midlands recorded the strongest growth in portfolio size, with landlords increasing holdings by an average of 3.7 properties to reach 11.5 properties per portfolio. Smaller increases were also recorded across the East of England, Yorkshire and Humber, the South West and South East.
By contrast, average portfolio sizes fell most sharply in Central London and the North East, both down by 1.9 properties year-on-year. Wales, the East Midlands, Outer London and the North West also recorded declines.
Portfolio values also varied significantly by region. The West Midlands saw the largest annual increase, with average portfolio values rising 29.4% to £2.2m. The East of England and South East also recorded strong growth. Meanwhile, portfolio values declined sharply in the North West, Yorkshire and Humber and the South West.
Rental income growth was strongest in the North West, where average income per property rose by more than 52%, followed by the West Midlands, Wales, East of England and Central London. The North East was the only region to record a fall in rental income per property.
With the number of landlords across the UK estimated at just over 2.8 million, LegalforLandlords estimates the combined value of landlord portfolios now stands at around £4.8tn.
However, the figures also underline the continuing issue of tenant arrears within the sector. Around 30% of landlords are estimated to have experienced arrears at some point during the past year — equivalent to roughly 846,000 landlords nationwide.
Sim Sekhon, group CEO at LegalforLandlords, commented: “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. The landlords performing strongest are those taking a more strategic approach to managing risk, whether that’s through stronger tenant referencing, rent protection measures, or reviewing the long-term structure of their portfolios.
“The Renters’ Rights Act is also already influencing landlord behaviour. As the sector moves into a more regulated environment, particularly around possession reform and tenant protections, preventative measures such as affordability checks, early arrears intervention, and professional portfolio management are becoming increasingly important.
“At the same time, the regional variation in this data shows that local market dynamics are now playing a much greater role in investment performance. Landlords can no longer rely on broad national trends alone when making investment decisions.”
Read the orginal article: https://propertyindustryeye.com/btl-landlords-see-sharp-rise-in-rental-income-despite-widespread-arrears/?utm_source=rss&utm_medium=rss&utm_campaign=btl-landlords-see-sharp-rise-in-rental-income-despite-widespread-arrears
