Landlords expand portfolios as rental yields climb

Landlord portfolios are growing as rental yields rise amid market uncertainty.

Data from Fleet Mortgages shows that the average number of investment properties owned by its borrowers increased from 16 in Q2 to 18 in Q3, compared with 12 in Q3 2025.

Meanwhile, average annual rental yields across England and Wales rose to 7.9% in Q3 2026.

Regional variations in rental yields

According to Fleet Mortgages’ data, landlords with 15 or more buy-to-let properties accounted for 30% of applications submitted to the lender during the quarter, up from 26% in Q2 and 23% a year earlier. Meanwhile, 66% of Fleet Mortgages’ applications came from landlords owning four or more properties.

At the same time, the proportion of applications from landlords with between one and three properties fell from 29% in Q2 to 24%, while applications from first-time landlords edged up from 9% to 10%.

The data also revealed regional variations in rental yields, with the North West and Wales recording annual falls in average yields.

On a quarterly basis, only East Anglia, the North West and Wales experienced declines, while the North East remained unchanged at 9.2%. Yorkshire & Humberside moved to the top of the regional yield table in Q3, with average yields rising to 9.3%, up from 8.2% a year earlier and 8.7% in Q2.

The North East followed at 9.2%, while the North West, East Midlands and West Midlands all continued to deliver average yields of more than 8%.

Greater London remained the lowest-yielding region at 6.4%, although it continued to record the highest average monthly rent at £2,597, up by almost 10% from Q2. At the other end of the rental value table, the North East recorded the lowest average monthly rent at £792.

Landlords continue to grow their portfolio

Steve Cox, chief commercial officer at Fleet Mortgages, said: “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.”

New landlords are still entering the market

He adds: “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 the 15th 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.”