Landlords across England and Wales are continuing to enjoy stable rental yields and remain active in the market, according to new data from Fleet Mortgages.

The specialist buy-to-let lender’s latest Rental Barometer, covering the second quarter of 2025, reveals that while some regional yields have dipped slightly over the past year, the overall picture remains one of resilience.

Average yields across England and Wales now stand at 7.5% – up marginally from 7.4% in Q1, though just 0.1% below the figure seen a year ago.

Wales has emerged as the standout performer, overtaking the North East to post the highest average yield at 9%. This marks a 0.7% increase year-on-year and a notable 1.3% rise compared to Q1 2025.

The North West and North East followed closely behind, reporting yields of 8.8% and 8.7% respectively.

Fleet said the enduring appeal of these regions lies in the combination of relatively low property prices and strong tenant demand, which continues to outstrip supply.

REGIONAL DECLINES

Four regions registered year-on-year yield declines, with the sharpest fall recorded in the North East, down from 10.1% in Q2 2024 to 8.7% this year. The West Midlands and East Anglia also posted annual falls of 0.8% and 0.6% respectively.

However, Fleet emphasised that the quarter-on-quarter drop across these three areas was limited to 0.5%, suggesting a degree of stability despite the broader downward trend.

Quarterly yield increases were also recorded in the East Midlands, North West and South West, each of which saw rises of 0.4%, further underlining what Fleet described as “a strong and stable foundation” for landlords.

Rental values also climbed in most regions over the quarter. The North East saw a significant 21.8% jump, with Wales up 7.8% and Greater London 6.5%. These gains helped push the overall quarterly increase in rents across England and Wales to 2.9%.

The most affordable monthly rent was found in Yorkshire and Humberside at £861, while Greater London retained its position as the most expensive region, with an average rent of £2,328.

Despite economic uncertainty, landlords remain active, with 39% of Fleet’s borrowers looking to purchase – unchanged from the previous quarter – and 54% holding portfolios of four or more properties. First-time landlord activity also held steady at 14%, suggesting continued interest from new entrants to the market.

INCORPORATION APPEAL

Limited company structures continue to dominate, accounting for 81% of applications, compared with 19% from individual borrowers. Fleet said its competitive pricing remains a factor, with average two- and five-year fixed rates falling to 4.35% and 5.13% respectively, compared to market averages of 4.93% and 5.27%.

Steve Cox, chief commercial officer at Fleet Mortgages, said the figures underscore landlords’ resilience and the enduring strength of the private rental sector.

“While we’ve seen some modest annual dips in specific regions, overall yields remain robust, with the quarterly increase to 7.5% reflecting a strong and stable foundation for landlords seeking long-term income and capital growth,” he said.

“It’s particularly encouraging to see Wales now leading the table with a 9% average yield, and the North West and North East remaining highly competitive.

“These areas continue to offer landlords a compelling mix of yield, affordability and tenant demand.”

Cox also highlighted the continued role of landlords with larger portfolios, and the growing importance of limited company structures in sustaining buy-to-let activity.

“It’s clear landlords are still very much in the market – over half of our business continues to come from those with four or more properties, and purchase demand has held steady despite wider economic pressures,” he said.