Landlord profits reached their highest level in nearly two years in the third quarter of this year, according to Paragon Bank data.
According to a survey by a specialized bank, 87% of buying and selling owners said they had made a profit during the same period, an increase of 7% year-on-year and the highest level since the first quarter of 2022. 
The study has continuously tracked landlord profitability reports on a quarterly basis for over a year, it added.
It comes as the average private monthly rent in the UK rose 8.4% to £1,295 in the year to September, according to the latest data from the Office for National Statistics.
This is unchanged from last month and is lower than March's annual rate of increase of 9.2%, which was the highest on record, according to the government agency, but more than four times the inflation rate of 1.7%.
Paragon's research digs deeper: on average, 17% of landlords report making a large profit, and 70% report making a small profit.
The proportion of real estate investors who lost money in the third quarter fell to 4% from 6% in the previous three months, and from 8% a year earlier.
The remaining 9% of landlords broke even.
On a regional basis, landlords operating in the East of England have the highest net income, with 90% making a profit.
This was followed by South West and East Midlands lettings, with 89% and 88% of BTL owners reporting profits respectively.
By type of tenant, real estate investors renting to students were most likely to have made a profit at 91%, followed by families with children at 88% and couples at 87%.
Russell Anderson, Commercial Director, Home Loans, Paragon Bank, said: “Landlords have faced rising costs over the past two years, but these findings demonstrate that many landlords have managed their businesses wisely to remain profitable and are now seeing improved profits. It confirms our belief that there is.”
“The main impact of this is likely to be strong demand for rental housing on the back of an improving economy due to lower inflation.”
Pegasus Insight surveyed 720 landlords in September and October on behalf of Paragon Bank.
