The gap between rental yields in the North and South of England has narrowed during the second quarter of 2026, according to Fleet Mortgages’ latest Rental Barometer.
The Fleet Mortgages Quarterly Rental Barometer provides a regional snapshot of rental yield trends with this iteration comparing Q2 2026 to Q2 2025.
At a national level, average yields for England & Wales rose by 0.3% annually to 7.8%; quarter-on-quarter however showed there had been a dip from 8.1% in Q1.
While the North East continues to offer the highest average rental yield at 9.2%, it has dropped by 0.6% from the previous quarter, while Yorkshire and Humberside was down by 0.3%, and the West Midlands also down by 0.6%.
By comparison, Greater London saw yields improve from 6.1% to 6.3% during the quarter, while the South East held steady at 6.9%.
Fleet said the data suggests the traditional North/South divide remains, but is becoming less pronounced as rental markets across England & Wales continue to mature, and the traditional, higher-yielding regions in the North began to see a plateauing.
In other facets of the buy-to-let market, Fleet said Q2 had been characterised by two very different market conditions, with the opening weeks seeing mortgage product pricing come under significant pressure as financial markets reacted to the conflict in Iran and rising swap rates.
However, it added that conditions had improved during the latter half of the quarter, allowing lenders to begin reducing rates once again and reintroducing products withdrawn during the earlier volatility.
Fleet believes this improving lending environment is likely to support landlord confidence during the second half of the year, although it cautioned that market volatility is becoming a more regular feature of the mortgage market and investors should continue to take a longer-term view.
The lender’s own figures also suggest landlords remain active.
Purchase business increased from 33% of applications in Q1 to 36% in Q2, while over 62% of applications came from portfolio landlords owning four or more properties. Limited company borrowing also remained dominant, accounting for 78% of all applications, underlining the continued professionalisation of the sector.
Steve Cox, chief commercial officer at Fleet Mortgages, commented: “Northern and Midlands’ regions, along with Wales, continue to offer some of the strongest rental yields in the country and remain attractive areas for landlords looking to maximise income.
“However, one of the more interesting themes from this quarter’s Rental Barometer data is that the gap between North and South does appear to be narrowing slightly, which suggests opportunities continue to exist across a much broader range of locations.
“Equally encouraging is the way the wider mortgage market has recovered over the course of the quarter.
“We started Q2 dealing with significant uncertainty as funding costs rose and pricing came under pressure, but conditions have improved considerably in recent weeks, allowing lenders to reduce rates and expand product choice once again.”
He added: “That creates a much more positive backdrop for landlords than appeared likely earlier in the quarter. Tenant demand remains strong, purchase activity has picked up again and professional landlords continue to invest where they see long-term value.
“Of course, recent years have taught us that markets can change quickly, so landlords should continue to expect periods of volatility. The important point is the fundamentals of the private rented sector remain strong and those taking a long-term approach should continue to find attractive opportunities across the market.”
