Rental yields across England and Wales pushed higher at the end of last year, highlighting the continued appeal of buy-to-let even as parts of the sales market remain subdued.
Data from Fleet Mortgages’ Q4 2025 Buy-to-Let Rental Barometer shows average yields rose to 7.7% in the final quarter, up 0.3 percentage points on a year earlier and 0.2 points higher than in the previous quarter.
The North East remained the strongest performing region, with average yields climbing to 9.6%, while Yorkshire and Humberside, the North West, the West Midlands and the East Midlands all recorded yields of 8% or more.
Although three regions saw marginal annual falls, Fleet says the overall picture was one of sustained strength, driven by firm tenant demand and rising rents.
NORTH SOUTH DIVIDE
Importantly for investors, the long-running gap between northern and southern markets continued to narrow. The South West, East Anglia, the South East and Greater London all posted annual increases in average yields, with London improving from 5.8% to 6.3% over the year.
Lower borrowing costs also helped support landlord confidence. Fleet’s average 2-year fixed buy-to-let rate edged down from 4.35% in the third quarter to 4.27% in Q4, while its five-year fixed rate slipped from 5.04% to 4.97%.
Portfolio landlords remain dominant in the market.
Portfolio landlords remain dominant in the market. Limited company borrowing accounted for 76% of Fleet’s applications in the quarter, and landlords with more than six properties made up 55% of all borrowers. The average Fleet client now owns 14 investment properties, up from 12 in the previous quarter.
First-time landlords made up 11% of applications, only slightly below the previous quarter, while purchase loans continued to account for more than a third of business, with the remainder split between remortgaging and product transfers.
WIDER PICTURE REMAINS SOLID
Steve Cox, Chief Commercial Officer at Fleet Mortgages, says: “As this latest Rental Barometer confirms, 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.
“At a national level, yields are now close to 8%, while a number of regions are above that level. Regions in the North continue to lead the way but it is also a real positive to see yields rising across much of the South, which points to a more even market.
“While a small number of regions saw slight dips, the wider picture remains solid. We are seeing portfolios grow, with the average number of properties held by our landlord clients increasing again this quarter, showing ongoing confidence in buy-to-let investment.”
