"While some Southern regions have lower yield percentages, this is normal given property prices. They continue to deliver in terms of capital appreciation, and monthly rental values remain high"
- Steve Cox - Fleet Mortgages
Rental yields across England and Wales remained stable in Q2 2025, as landlords continued to show confidence in the private rental sector despite minor regional fluctuations. Fleet Mortgages' latest Buy-to-Let Rental Barometer indicates consistent demand and investor resilience, even as some areas saw modest annual dips.
The report, which compares rental yield data from Q2 2024 to Q2 2025, highlights that average rental yields across England and Wales dipped by just 0.1% year-on-year. However, yields increased slightly on a quarterly basis, rising from 7.4% in Q1 to 7.5% in Q2.
“Our latest Rental Barometer shows yields across England and Wales continue to hold firm, underlining the enduring strength of the private rental sector and landlords’ commitment to delivering the supply required by sustained tenant demand,” said Steve Cox, chief commercial officer at Fleet Mortgages. “While we’ve seen some modest annual dips in specific regions, overall yields remain robust, with the quarterly increase to 7.5% reflecting a strong and stable foundation for landlords seeking long-term income and capital growth.”
Wales emerged as the strongest performer, with average yields climbing to 9%, representing a 0.7% annual increase and a 1.3% rise since Q1. The North West followed closely with average yields of 8.8%, while the North East recorded 8.7%, despite a 1.4% dip year-on-year. Fleet attributed the continued appeal of these regions to strong yields, comparatively low property prices, and ongoing rental demand outpacing supply.
Other regions showing quarterly yield growth included the East Midlands, the North West, and the South West, each with a 0.4% increase. In contrast, the West Midlands and East Anglia saw slight annual declines of 0.8% and 0.6% respectively. Despite these drops, quarterly figures for these areas declined only marginally, by 0.5%, suggesting a potential for yield stability moving forward.
“It’s particularly encouraging to see Wales now leading the table with a 9% average yield, and the North West and North East remaining highly competitive,” Cox explained. “These areas continue to offer landlords a compelling mix of yield, affordability and tenant demand, all of which remain critical factors in building sustainable portfolios.”
Fleet also reported notable changes in average monthly rental values. The North East experienced the most significant increase, up by 21.8% over the quarter. Wales followed with a 7.8% rise, while Greater London saw rents increase by 6.5%. However, four regions recorded a decline:
Yorkshire and the Humber fell by 1%, the South West by 1.6%, the South East by 3.5%, and the West Midlands by 5.8%. On average, rental values across all regions were up 2.9% from the previous quarter.
While Greater London continues to command the highest monthly rents at £2,328 per calendar month (pcm), Yorkshire and the Humber remains the most affordable at £861 pcm.
“While some Southern regions have lower yield percentages, this is normal given property prices. They continue to deliver in terms of capital appreciation, and monthly rental values remain high,” said Cox. “The growth in rents across most regions – particularly the substantial 21.8% jump in the North East – illustrates that tenant demand is still outpacing supply, supporting continued investment.”
Landlord activity remains strong, with 54% of Fleet’s clients owning four or more properties and 39% actively looking to expand their portfolios. First-time landlord interest also remained steady at 14%, matching Q1 figures.
“It’s clear landlords are still very much in the market – over half of our business continues to come from those with four or more properties, and purchase demand has held steady despite wider economic pressures,” Cox noted. “It’s also pleasing to see first-time landlord activity staying consistent at 14% which suggests new entrants are still seeing long-term value in buy-to-let.”
The data also underscores the continued dominance of limited company borrowing in the sector. During Q2, 81% of all applications to Fleet came from limited companies, while only 19% were from individual borrowers.
Fleet also reported improvements in its product pricing, with the average two-year fixed rate falling to 4.35% and the five-year fixed rate down to 5.13%, a drop from 4.63% and 5.15% respectively in Q1. These rates remain below peer market averages, which stand at 4.93% and 5.27%.
“We’re also proud to be continually competitive on pricing, with our fixed-rate products outperforming peer averages,” Cox added. “Combined with strong rental yield and continued appetite, particularly from limited company landlords – now 81% of all applications – it shows there are still plenty of reasons to be optimistic about the future of the buy-to-let sector.”
