Rental Yields Strengthen Nationally in Q4 2025

Rental yields across England and Wales improved in the final quarter of 2025, extending gains seen earlier in the year. Fleet Mortgages’ Q4 Rental Barometer reveals the national average rental yield reached 7.7%, marking a 0.3% increase compared with the same period in 2024 and a 0.2% rise since the previous quarter. This steady growth highlights the ongoing appeal of buy-to-let investments in the UK private rented sector.

Fleet Mortgages’ chief commercial officer, Steve Cox, commented: “Average rental yields have continued to move in the right direction, both year-on-year and quarter-on-quarter, which will be welcome news for landlords.” He noted that yields are now close to 8% nationally, with several regions exceeding this level.

Northern Regions Lead Yield Growth

The strongest rental yield performance came from the North East, where yields climbed to 9.6%, supported by annual growth of 0.3% and a quarterly increase of 0.6%. Other northern and midlands regions also posted strong returns, with Yorkshire and Humberside, the North West, the West Midlands, and the East Midlands all achieving average yields of 8% or more.

This regional strength continues to narrow the long-standing yield gap between northern and southern markets. While northern areas maintain a lead, yields in southern regions such as the South West, East Anglia, the South East, and Greater London also recorded year-on-year improvements. According to Steve Cox, “it is also a real positive to see yields rising across much of the South, which points to a more even market.”

Market Resilience and Portfolio Growth

Despite a few regions experiencing marginal annual declines, Fleet Mortgages emphasised the overall resilience of the private rented sector. Strong tenant demand combined with rising rents continues to underpin returns for landlords, even where growth has softened slightly.

The data also shows that landlord portfolios are expanding. The average number of properties held by Fleet’s landlord clients increased from 12 to 14 in the quarter, indicating ongoing confidence in buy-to-let investment. Experienced investors remain prominent, with 55% of applicants owning more than six properties. Limited company structures account for 76% of applications, down from 81% previously, while first-time landlords represent 11% of applicants, reflecting sustained interest from new entrants.

Transaction Activity and Implications for Landlords

Purchases made up 37% of Fleet Mortgages’ total business in the quarter, with the remainder consisting of remortgaging and product transfers. This balance suggests that while some landlords are expanding their portfolios, others are managing existing investments through refinancing.

For UK landlords, the continued rise in rental yields and portfolio sizes indicates a positive environment for buy-to-let investment. The narrowing yield gap between regions may encourage diversification across different markets. However, landlords should remain mindful of local market conditions, as some areas experienced slight yield dips.

What It Means for UK Landlords

The upward trend in rental yields offers reassurance to landlords about the profitability of their investments, particularly in northern England and the Midlands. The growth in average portfolio size suggests that established landlords are confident in expanding their holdings, while the presence of first-time landlords indicates ongoing market accessibility.

Landlords should consider the benefits of limited company ownership, which remains the dominant structure for buy-to-let applications. Monitoring regional yield trends can help landlords identify areas with stronger returns and balance their portfolios accordingly.

Suggested internal link anchors

• rental yields
• buy-to-let investment
• private rented sector
• landlord portfolios
• limited company ownership
• tenant demand
• rental market trends
• property investment returns
• regional rental markets
• mortgage remortgaging
• first-time landlords

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/