"While recent economic instability, particularly the uncertainty caused by Trump’s tariffs, is understandably affecting business confidence, these figures provide tangible evidence that buy-to-let remains a strong investment for landlords"
- Russell Anderson - Paragon Bank
New figures from Paragon Bank reveal that buy-to-let properties are currently generating the highest average rental yields since February 2011. In April 2025, landlords achieved average rental yields of 7.11%, just slightly below the 7.12% recorded in February 2011.
After consecutive monthly increases during the first quarter of 2025, the latest figure surpasses the 6.94% yield recorded at the end of Q4 2024, marking a 13-year high. Paragon Bank’s mortgage data for buy-to-let purchases and remortgages shows that this increase in rental yields reflects a year-on-year growth of 40 basis points.
This growth is driven by a moderation in house price inflation alongside rising rent levels, which continue to be fuelled by strong tenant demand and a shortage of available rental homes.
Longer-term trends also point to a steady increase in average rental yields since the 4.91% low seen in May 2017.
Wales remains the top-performing region for buy-to-let returns, with average yields of 8.43% in April 2025, up from 8.09% in December 2024. In contrast, Greater London continues to offer the lowest rental yields, at 5.78%, despite a 30 basis point increase since Q4 2024.
Data on property types reveals that more complex buy-to-let propositions tend to offer the highest yields. For example, Houses in Multiple Occupation (HMOs) saw yields of 8.50% in April 2025, a slight increase from 8.41% in December 2024.
“Our latest lending data highlights how average rental yields have continued to increase from the 13-year high we revealed at the end of last year," comments Paragon Bank’s commercial director of mortgages, Russell Anderson. "While recent economic instability, particularly the uncertainty caused by Trump’s tariffs, is understandably affecting business confidence, these figures provide tangible evidence that buy-to-let remains a strong investment for landlords.”
He adds, “This is especially true for those targeting properties with higher returns, such as HMOs, or investing in regions where property remains more affordable, yet strong tenant demand persists across the UK.”
