Average annual rental yields across England and Wales rose to 7.9% in Q3 2026, according to the latest Rental Barometer from buy-to-let and specialist lender Fleet Mortgages. The figure compares with 7.5% in Q3 2025, while the average number of investment properties owned by the lender's borrowers rose to 18.
The quarterly Barometer offers a regional snapshot of rental yields alongside lending and borrower data. Only two of the 10 regions Fleet covers, the North West and Wales, recorded an annual fall in average yields.
Regional rental yields
Yorkshire & Humberside moved to the top of the regional rental yields table during Q3, rising from 8.2% a year ago and 8.7% last quarter to 9.3%. The North East ranked second at 9.2%, unchanged from the previous quarter, while the North West, East Midlands and West Midlands all continued to deliver averages above 8%. Only East Anglia, the North West and Wales saw quarterly declines.
Year-on-year, the East Midlands climbed from 7.5% to 8.4% and the West Midlands from 7.5% to 8.2%, while the North East edged up from 9.0% to 9.2%. The North West slipped from 8.5% to 8.3%, and Wales fell from 8.2% to 7.5%. Further south, the South East rose from 6.5% to 7.2%, the South West from 7.0% to 7.1%, East Anglia from 6.6% to 7.0% and Greater London from 5.9% to 6.4%.
Greater London remained the lowest-yielding region at 6.4%, although it continued to command the highest average monthly rent at £2,597, up nearly 10% since Q2. At the other end of the table, the North East recorded the lowest average monthly rent at £792, down just over 6% since the last Barometer.
Fleet said the Q3 figures provided further evidence of the continuing professionalisation and growth of the landlord community, despite another quarter characterised by volatile financial markets and mortgage pricing.
Borrower profile and pricing
The average number of investment properties owned by Fleet borrowers increased from 16 in Q2 to 18 in Q3, compared with 12 in Q3 2025. Landlords with 15 or more buy-to-let properties accounted for 30% of applications, up from 26% in Q2 and 23% a year ago, and 66% of applications came from landlords owning four or more properties. By contrast, applications from landlords with between one and three properties fell from 29% in Q2 to 24%, while first-time landlord applications edged up from 9% to 10%.
Purchase activity eased to 34% of Fleet business from 36% in Q2, although it remained above the 33% recorded in Q1. Average rental cover at origination fell from 144% to 132%, reflecting affordability pressures from higher mortgage rates and funding costs. Limited company borrowing continued to dominate at 71% of applications, down from 78% in the previous quarter.
Mortgage pricing mirrored that volatility. The average market two-year fixed rate increased from 4.78% to 4.89%, and the average five-year fixed rate rose from 5.44% to 5.57%. Fleet's own average two-year pricing went up from 4.50% to 4.61%, while its average five-year rate moved the other way, falling by 18 basis points from 5.35% to 5.17%.
"Q3 has been another quarter in which advisers and their landlord clients have had to deal with considerable uncertainty, particularly as geopolitical developments have continued to feed through into energy prices, inflation expectations, swap rates and ultimately mortgage pricing," said Steve Cox, chief commercial officer at Fleet Mortgages (pictured).
"It is therefore not surprising to see purchase activity ease slightly during the quarter, or rental cover come under further pressure, but we should be careful about interpreting either of those movements as landlords stepping away from buy-to-let.
"In fact, some of the other figures point very strongly in the opposite direction. The average Fleet landlord now owns 18 investment properties compared with 12 a year ago, almost a third of our applications are coming from landlords with 15 or more properties, and two-thirds are from those owning at least four.
"That suggests professional landlords continue to grow their portfolios where the right opportunities present themselves, even if market conditions influence precisely when they decide to purchase or refinance.
"The rental fundamentals also remain supportive, with average England and Wales yields increasing to 7.9% and only two of the 10 regions we lend in recording a year-on-year fall. Yorkshire & Humberside moving to 9.3% also shows there continue to be strong regional opportunities for landlords prepared to look at the underlying rental and property fundamentals.
"We should also recognise that financial market volatility is not the only change landlords are dealing with. The first phase of the Renters' Rights Act is now embedded, and the next stage of implementation will begin with the rollout of the property registration service in the West Midlands from the 15th December before moving across England during 2027.
"All of this reinforces the importance of advice. Landlords are making financing and investment decisions against a backdrop of changing mortgage pricing, affordability pressures and significant regulatory change, and advisers who understand specialist buy-to-let have a vitally important role to play in helping these clients assess their options.
"What remains encouraging is that, despite everything the sector has dealt with during 2026, experienced landlords are continuing to invest and new landlords are still entering the market. Conditions may continue to move, but our Q3 figures suggest the longer-term commitment of professional landlords to the private rental sector remains strong."
