Landlords across England and Wales recorded solid rental yields through the final quarter of 2025, according to Fleet Mortgages’ latest Rental Barometer.
The data shows average rental yields increased to 7.7% across England and Wales, rising both year on year and quarter on quarter. Fleet said this reflects a private rental sector where tenant demand remains high, supply continues to lag behind need and rental values are rising in most regions.
The North East delivered the strongest performance, with an average yield of 9.6%. Fleet attributed this to sustained tenant demand combined with relatively lower purchase prices.
Several other regions also reported yields at or above 8%, including:
Yorkshire and Humberside
the North West
the West Midlands
the East Midlands
In southern England, yields also moved higher across every region tracked. The South West, East Anglia, the South East and Greater London all recorded year-on-year increases, which Fleet said points to a more balanced rental market developing beyond traditional northern hotspots.
The Barometer also identified improving conditions on the finance side. Average fixed mortgage rates eased again during the quarter, with both two-year and five-year products becoming cheaper. Fleet said this shift is helping affordability and supporting refinancing and investment activity.
Landlord profiles continue to tilt towards larger, established portfolios. More than half of applications came from landlords with six or more properties, and the average Fleet borrower now owns 14 rental homes. Limited company structures remain the most common route for borrowing, reflecting a focus on longer-term portfolio management.
First-time landlord activity slipped slightly, but new entrants still represented more than one in ten applications, showing buy-to-let continues to attract fresh investors despite market pressures.
“Our latest Rental Barometer shows rental returns remain strong across England and Wales, with average yields continuing to move up,” said Steve Cox, chief commercial officer at Fleet Mortgages. “For landlords, this reflects a market where tenant demand is still high, supply is not keeping pace, and rental values are thus holding firm, helping to support income even as costs remain under pressure.
“What stands out is not just the performance of the North, but the fact that yields are rising across much of the South as well. This points to a more even rental market, where landlords in a wider range of locations are seeing improved returns rather than growth being concentrated in just a few areas.
“We are also seeing landlords act with confidence. Portfolio sizes continue to increase, and limited company borrowing remains the main route for many investors. That tells us landlords are planning ahead, managing their businesses carefully, and taking a long-term view of buy-to-let.
“With mortgage rates easing again and affordability improving, conditions are becoming more supportive for both refinancing and new purchases. Demand for rental homes is not going away, supply remains tight in many regions, and that combination continues to underpin buy-to-let as a reliable source of income for committed landlords.”
