"There’s no question that certain regions, particularly Wales and the North East, are offering a compelling mix of affordability and rental return, while the South continues to deliver strong capital value and long-term resilience"
- Steve Cox - Fleet Mortgages
Fleet Mortgages’ latest Rental Barometer for Q2 2025 highlights continued strength in the private rental sector, with landlords across England and Wales benefiting from rising rents, solid yields and sustained activity. The data suggests tenant demand remains strong, while limited supply continues to underpin growth.
Average rents rose by 2.9% over the quarter across all regions. The North East recorded the sharpest increase at 21.8%, followed by Wales at 7.8% and Greater London at 6.5%. Greater London remains the most expensive rental region, with average monthly rents now reaching £2,328. East Anglia follows at £1,640, while the South East recorded £1,520.
At the other end of the scale, Yorkshire & Humberside (£861), the North East (£900) and Wales (£1,061) remain the most affordable regions, yet these areas continue to deliver competitive rental returns.
Rental yields held steady at 7.5%, a slight rise from 7.4% in Q1. Wales led the regional yield table at 9%, followed by the North West at 8.8% and the North East at 8.7%. Four regions recorded a quarter-on-quarter increase in yields, with Wales seeing the largest rise of 1.3%.
Some year-on-year softening in yield was noted in four regions, including the North East (-1.4%) and the West Midlands (-0.8%). These changes appear to reflect a market adjustment following notable gains seen in 2023 and early 2024.
The report also indicates sustained confidence among both established and new investors. Over half (54%) of all Q2 mortgage applications to Fleet were from landlords with four or more properties, and the average portfolio size rose to 10 properties. Applications from first-time landlords held steady at 14%, matching the previous quarter and pointing to long-term optimism about property investment.
Limited company borrowing remains dominant, with 81% of mortgage applications submitted via corporate structures. This trend reflects ongoing tax benefits and suitability for portfolio landlords.
Fleet’s pricing is also cited as a factor in ongoing landlord activity. Average two- and five-year fixed rates in Q2 were 4.35% and 5.13%, respectively — both below peer group averages of 4.93% and 5.27%. Average rental cover at application stood at 187%, and the typical loan size was £198,000.
“These latest figures show the private rental sector continues to perform strongly, particularly for landlords who know how and where to invest,” said Steve Cox, chief commercial officer at Fleet Mortgages. “Rent levels are rising in many areas, yields are holding up well, and we’re still seeing plenty of appetite from both seasoned portfolio landlords and new entrants alike,"
“There’s no question that certain regions, particularly Wales and the North East, are offering a compelling mix of affordability and rental return, while the South continues to deliver strong capital value and long-term resilience,"
“What’s also clear is the so-called landlord exodus hasn’t materialised, our data shows 39% of business in Q2 was for property purchase, and the average portfolio size has grown to 10 properties. This is a sign of landlords actively reshaping and expanding their portfolios in line with evolving tenant demand,"
“At Fleet, we’re committed to supporting landlords with transparent lending, competitive rates and tailored support for limited company borrowers and portfolio clients,"
“We’ll continue to evolve our proposition as the market shifts, and as always, we encourage landlords to work closely with advisers to make informed, long-term decisions.”
