"Yields are edging upwards, rents are growing across many regions, and tenant demand remains strong. For landlords, that means ongoing opportunities to generate good returns from property investment"
- Steve Cox - Fleet Mortgages
Landlords across England and Wales are continuing to record steady or improving rental yields, supported by strong tenant demand and rising rental values, according to Fleet Mortgages’ Q3 2025 Buy-to-Let Rental Barometer.
The quarterly report compares yield data from Q3 2024 to Q3 2025, providing a regional view of buy-to-let performance across England and Wales. The figures show that yields have strengthened in most areas, with landlords benefiting from both stable income and capital growth potential.
The North East remains the highest-yielding region at 9%, followed by the North West (8.5%) and Wales and Yorkshire & Humberside (both 8.2%). The South West (7%) and East Anglia (6.6%) recorded some of the largest year-on-year improvements. Nationally, average yields rose to 7.5%, up from 7.2% in 2024.
While the North East and West Midlands saw marginal dips, these were offset by gains elsewhere. Wales achieved the biggest annual increase of 1%, with notable rises also seen in the South West and East Anglia.
Fleet Mortgages said the findings highlight a market that continues to reward landlords, despite cost pressures and regulatory changes. Rental values also remain on an upward trend, led by significant increases in several regions.
The West Midlands saw rents grow by over 21% year-on-year, while the North East followed closely at just above 20%. Yorkshire & Humberside also recorded almost 20% annual growth. Even where quarterly falls occurred, including East Anglia, Wales and London, the long-term direction remains positive, supported by strong tenant demand and limited housing supply.
Fleet said this combination of rising rents and stable yields is translating into higher income potential for landlords. With competition for quality homes remaining intense, investor confidence appears to be holding firm.
The data also shows a shift in how landlords are structuring their businesses. Limited company borrowing now represents 81% of Fleet’s total applications, as more investors seek tax-efficient ownership and professional management structures. Larger landlords are becoming increasingly dominant, with 61% of applications coming from those holding four or more properties. Those with 15 or more properties now account for almost 25% of Fleet’s total business, up from 16% the previous quarter.
New entrants are also active, with 12% of applications coming from first-time landlords, suggesting continued appetite for property investment despite affordability challenges.
Market conditions in Q3 were influenced by the Bank of England Base Rate falling from 4.25% to 4%, which fed through to lower mortgage pricing. Average market rates dropped by around 20 basis points (bps) for two-year fixes and 15bps for five-year deals. Fleet also adjusted its own pricing, reducing five-year products by 10bps to 5.04%, while keeping two-year averages at 4.35%.
Purchases continued to represent more than a third of Fleet’s activity, while remortgages and product transfers remained steady as landlords focused on managing borrowing costs.
“Our latest Rental Barometer shows a sector that is not only resilient but evolving in a way that strengthens its foundations,” said Steve Cox, chief commercial officer at Fleet Mortgages. “Yields are edging upwards, rents are growing across many regions, and tenant demand remains strong. For landlords, that means ongoing opportunities to generate good returns from property investment."
He added, “What we are also seeing is landlords adapting how they operate. More are running their portfolios through limited companies, more are scaling up, and more are building for the long term. That level of professionalisation is a positive sign; it demonstrates that landlords are not leaving the market, but are instead putting themselves in a better position to deal with regulatory and financial challenges."
Cox concluded, “There are, of course, hurdles; affordability remains a key issue, and new regulations such as the forthcoming Renters’ Rights Bill are adding to the burden. But the fundamentals remain in landlords’ favour. Demand is not going away, supply is still constrained, and competitive mortgage pricing is beginning to return. For landlords who are prepared to adapt, buy-to-let remains a viable and rewarding investment.”
