Professional landlords are continuing to expand their portfolios despite higher mortgage costs, with the average Fleet Mortgages borrower now owning 18 investment properties.

Fleet’s Q3 2026 Rental Barometer shows the average portfolio has increased from 16 properties in the previous quarter and 12 a year earlier, while larger landlords are accounting for a growing share of mortgage applications.

Landlords with at least 15 buy-to-let properties made up 30% of applications in the third quarter, compared with 26% in Q2 and 23% in Q3 2025. Overall, 66% of applications came from landlords with portfolios of four or more properties.

By contrast, the proportion of applications from landlords owning between one and three properties fell from 29% to 24% quarter-on-quarter. First-time landlord applications edged up from 9% to 10%.

YIELDS RISE ACROSS MOST REGIONS

The expansion in portfolio sizes coincided with an increase in rental yields. Fleet recorded an average yield across England and Wales of 7.9% in Q3, up from 7.5% a year earlier.

Yorkshire & Humberside moved to the top of the regional rankings, with its average yield reaching 9.3%, against 8.7% in Q2 and 8.2% a year ago. The North East followed at 9.2%, while the East Midlands, North West and West Midlands all produced average yields above 8%.

Only the North West and Wales recorded year-on-year falls among the 10 regions covered. Wales saw the largest decline, from 8.2% to 7.5%, while the North West slipped from 8.5% to 8.3%.

Greater London remained the lowest-yielding region at 6.4%, although average monthly rents were the highest at £2,597, having risen by nearly 10% since Q2. The North East had the lowest average monthly rent at £792, down just over 6% from the previous quarter.

PURCHASE ACTIVITY EASES

Purchases accounted for 34% of Fleet’s business during Q3, down from 36% in the previous quarter but still above the 33% recorded in Q1.

Affordability also tightened, with average rental cover at origination falling from 144% to 132%. Limited company borrowing remained the dominant ownership structure, accounting for 71% of applications, although this was down from 78% in Q2.

Mortgage pricing increased across the wider market during the quarter. The average two-year fixed rate rose from 4.78% to 4.89%, while the average five-year fixed rate increased from 5.44% to 5.57%.

Fleet’s average two-year pricing increased from 4.50% to 4.61%. Its average five-year rate fell by 18 basis points, from 5.35% to 5.17%.

Steve Cox, chief commercial officer at Fleet Mortgages, says: “Q3 has been another quarter in which advisers and their landlord clients have had to deal with considerable uncertainty, particularly as geopolitical developments have continued to feed through into energy prices, inflation expectations, swap rates and ultimately mortgage pricing.

“It is therefore not surprising to see purchase activity ease slightly during the quarter, or rental cover come under further pressure, but we should be careful about interpreting either of those movements as landlords stepping away from buy-to-let.

“In fact, some of the other figures point very strongly in the opposite direction. The average Fleet landlord now owns 18 investment properties compared with 12 a year ago, almost a third of our applications are coming from landlords with 15 or more properties, and two-thirds are from those owning at least four.

“That suggests professional landlords continue to grow their portfolios where the right opportunities present themselves, even if market conditions influence precisely when they decide to purchase or refinance.

“The rental fundamentals also remain supportive, with average England and Wales yields increasing to 7.9% and only two of the 10 regions we lend in recording a year-on-year fall.

“Yorkshire & Humberside moving to 9.3% also shows there continue to be strong regional opportunities for landlords prepared to look at the underlying rental and property fundamentals.

“We should also recognise that financial market volatility is not the only change landlords are dealing with. The first phase of the Renters’ Rights Act is now embedded, and the next stage of implementation will begin with the rollout of the property registration service in the West Midlands from 15 December before moving across England during 2027.

“All of this reinforces the importance of advice. Landlords are making financing and investment decisions against a backdrop of changing mortgage pricing, affordability pressures and significant regulatory change, and advisers who understand specialist buy-to-let have a vitally important role to play in helping these clients assess their options.

“What remains encouraging is that, despite everything the sector has dealt with during 2026, experienced landlords are continuing to invest and new landlords are still entering the market.

“Conditions may continue to move, but our Q3 figures suggest the longer-term commitment of professional landlords to the private rental sector remains strong.”