Landlords see yields rise as more professionalise

Landlords across England and Wales are continuing to benefit from strong returns, with most regions reporting annual improvements in yields and only two areas experiencing slight falls.

That’s according to Fleet Mortgages’ Q3 2025 Buy to Let Rental Barometer which reveals that the North East leads the way with yields averaging 9%.

It’s followed by the North West at 8.5%.

Yorkshire and Humberside and Wales both posted 8.2%, while the South West (7%) and East Anglia (6.6%) showed some of the most notable annual gains.

Fleet also says these areas remain attractive to landlords because of healthy yields, relatively low property prices and strong tenant demand.

PRS shifts towards professionalism

The lender’s chief commercial officer, Steve Cox, said: “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.”

He added: “What we are witnessing is a marked shift towards professionalism.

“Over four-fifths of our applications are now from limited companies, and the growth in landlords with 15 or more properties is particularly striking.”

Not all regions saw yields rise

At a national level, average yields across England and Wales rose by 0.3% year-on-year, reaching 7.5%.

While the North East (-0.7%) and West Midlands (-0.1%) registered modest annual dips, these were outweighed by stronger increases elsewhere.

Wales saw the largest improvement at +1%, followed by the South West (+0.9%), East Anglia (+0.7%) and Yorkshire & Humberside (+0.5%).

Average rents are rising

Average monthly rents across Fleet’s lending areas grew by 3.2% in the quarter.

Greater London rents are now an average of £2,165, followed by the South East (£1,662) and West Midlands (£1,563).

Year-on-year, rents jumped by 10.4%, with the West Midlands (+21.2%), North East (+20.8%) and Yorkshire and Humberside (+19.2%) recording the biggest surges.

Quarterly fluctuations saw rises in the West Midlands (+36.4%) and Yorkshire and Humberside (+25.3%) offset by falls in East Anglia (-8.5%), Wales (-7.6%) and Greater London (-7%).

Fleet says these shifts reflect supply and demand pressures locally.

Limited companies account for most applicants

The report also highlights a growing trend of consolidation and professionalisation of the private rented sector.

Limited company structures account for 81% of Q3 applications, while landlords with four or more properties made up 61%.

Nearly a quarter (23%) of applications came from landlords with 15 or more properties, up from 16% in the previous quarter.

First-time landlord activity held steady at 12%.

Landlords are scaling up

Mr Cox said: “Rather than exiting the sector, many landlords are scaling up, refinancing portfolios, and structuring their businesses in ways that help them absorb regulatory and cost pressures more effectively, while still pursuing property purchases.

“Affordability remains a hurdle, especially for those entering the market for the first time, but with tenant demand consistently outstripping supply, rental growth continues to be a strong driver of yields.”

He added: “The message from our data is clear: buy to let remains a viable and attractive proposition for professional landlords who are prepared to adapt, and for advisers who want to support their clients in building sustainable portfolios.”