Landlords across England and Wales are enjoying stronger returns as rental yields edged higher in the third quarter, underpinned by resilient tenant demand and a shift towards more professional landlord structures, according to Fleet Mortgages’ latest Buy-to-Let Rental Barometer.
The lender’s data shows average yields rose 0.3 percentage points year-on-year to 7.5%, with the North East remaining the highest-yielding region at 9%, followed by the North West at 8.5%.
Wales delivered the strongest annual uplift, climbing by a full percentage point to 8.2%, while the South West and East Anglia also posted significant gains.
Only the North East and West Midlands saw marginal dips, of 0.7% and 0.1% respectively.
DOUBLE-DIIGIT GROWTH
Average monthly rents rose by 3.2% during the quarter, with double-digit annual growth in the West Midlands (+21.2%), North East (+20.8%) and Yorkshire & Humberside (+19.2%).
However, quarterly shifts were uneven, with steep rises in the West Midlands and Yorkshire offset by falls in East Anglia, Wales and London.
Fleet said this reflected “localised supply-and-demand imbalances”.
The report also highlights the growing professionalisation of the sector. Limited company borrowing accounted for 81% of Fleet’s applications, while 61% came from portfolio landlords holding four or more properties.
Nearly a quarter were from those with 15 or more – up from 16% in the previous quarter.
RESILIENT AND ADAPTABLE
Steve Cox, Chief Commercial Officer at Fleet Mortgages, says: “Our latest Rental Barometer reinforces just how resilient and adaptable the private rental sector, and specifically landlord activity within it, has become.
“Yields across England and Wales edged up for the second quarter in a row, driven by sustained tenant demand and a market that, while challenging, continues to offer opportunities for well-structured and well-capitalised landlords.”
Fleet also pointed out that the Bank of England’s recent base rate cut to 4% had fed through into lower mortgage pricing, with average two- and five-year fixes falling by 15–20 basis points.
