"Regions in the North continue to lead the way, but it is also a real positive to see yields rising across much of the South, which points to a more even market"
- Steve Cox - Fleet Mortgages
Rental yields across England and Wales continued to rise on both an annual and quarterly basis, according to buy-to-let specialist lender Fleet Mortgages' latest Rental Barometer for Q4 2025.
The quarterly report provides a regional snapshot of rental yield trends, comparing Q4 2024 to Q4 2025. At a national level, average yields rose by 0.3% annually and 0.2% quarterly to reach 7.7%.
The North East remained the top-yielding region, moving up by 0.3% annually and 0.6% quarterly to 9.6%. Four regions, Yorkshire and Humberside, the North West, the West Midlands and East Midlands, all posted average rental yields at 8% and above.
Fleet said there had been a narrowing of the North-South average yield divide, with the South West, East Anglia, South East and Greater London all posting a yearly increase in average yield. While three regions posted slight falls in yearly average yield, the lender said the wider rental yield picture showed consistent strength, with landlords benefiting from good tenant demand coupled with rising rental values.
The data also highlighted further good news for landlord borrowers in terms of mortgage product rates. Fleet's average two-year fixed-rate mortgage had reduced from 4.35% in Q3 to 4.27% in Q4, while its average five-year fixed rate had reduced from 5.04% to 4.97%.
Limited company borrowing accounted for 76% of Fleet's Q4 applications, slightly down from the high of 81% in Q3. Landlords with over six buy-to-let properties made up 55% of all those applying for mortgages with Fleet during the quarter. The average number of investment properties held by Fleet landlord borrowers rose to 14 from 12 last quarter.
First-time landlord application activity dipped slightly to 11% from 12% last quarter, but the lender suggested this was still a strong number, highlighting the ongoing attractiveness of buy-to-let property investment.
Purchase business continued to make up more than a third of Fleet's mortgage business at 37%, with remortgaging and product transfers making up the rest of the applications received.
"As this latest Rental Barometer confirms, average rental yields have continued to move in the right direction, both year-on-year and quarter-on-quarter, which will be welcome news for landlords," said Steve Cox, chief commercial officer at Fleet Mortgages.
"At a national level, yields are now close to 8%, while a number of regions are above that level. Regions in the North continue to lead the way, but it is also a real positive to see yields rising across much of the South, which points to a more even market."
"While a small number of regions saw slight dips, the wider picture remains solid. We are seeing portfolios grow, with the average number of properties held by our landlord clients increasing again this quarter, showing ongoing confidence in buy-to-let investment."
He added, "At Fleet, we remain fully committed to the buy-to-let sector and to supporting advisers and their landlord clients." "That means offering a wide range of keenly-priced products across our three core areas: standard, limited company and HMO/MUFB. Alongside improving mortgage rates and greater levels of affordability, this breadth of choice helps advisers place cases with confidence in a market that continues to offer clear long-term opportunities."
