Landlords across England and Wales saw rental yields hold firm and move higher through the final quarter of 2025 as strong tenant demand and limited supply continued to underpin rental values.
Fleet Mortgages’ latest Rental Barometer shows average yields rose to 7.7% in Q4, increasing both quarter-on-quarter and year-on-year, highlighting the ongoing resilience of the private rental sector.
The North East once again delivered the highest average yield at 9.6%, supported by robust demand and lower property prices. Yields of 8% or more were also recorded across Yorkshire and Humberside, the North West, the West Midlands and the East Midlands.
Southern regions also saw yields improve. The South West, East Anglia, the South East and Greater London all posted year-on-year increases, pointing to what Fleet described as a more balanced rental market.
PORTFOLIO LANDLORDS
The Barometer shows landlord activity increasingly dominated by larger, established portfolios. More than half of applications came from landlords with six or more properties, with the average Fleet borrower now holding 14 rental homes. Limited company borrowing remains the preferred structure.
While first-time landlord activity dipped slightly, new entrants still accounted for more than one in ten applications, underlining the continued appeal of buy-to-let.
STAND OUT PERFORMANCE
Steve Cox, Chief Commercial Officer at Fleet Mortgages, says: “Our latest Rental Barometer shows rental returns remain strong across England and Wales, with average yields continuing to move up.
“For landlords, this reflects a market where tenant demand is still high, supply is not keeping pace and rental values are thus holding firm, helping to support income even as costs remain under pressure.
“What stands out is not just the performance of the North, but the fact yields are rising across much of the South as well. This points to a more even rental market, where landlords in a wider range of locations are seeing improved returns rather than growth being concentrated in just a few areas.”
AFFORDABILITY IMPROVING
And he adds: “We are also seeing landlords act with confidence. Portfolio sizes continue to increase, and limited company borrowing remains the main route for many investors.
“That tells us landlords are planning ahead, managing their businesses carefully, and taking a long-term view of buy-to-let.
“With mortgage rates easing again and affordability improving, conditions are becoming more supportive for both refinancing and new purchases.
“Demand for rental homes is not going away, supply remains tight in many regions, and that combination continues to underpin buy-to-let as a reliable source of income for committed landlords.”
