0:01 AM, 15th July 2025, About 4 months ago 3
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The private rented sector in England and Wales is thriving, with robust tenant demand, rising rents and steady landlord activity signalling strong market confidence, a report reveals.
Fleet Mortgages’ Q2 2025 Rental Barometer found that rents grew by 2.9% across all regions in England and Wales in the second quarter.
It says there were rent spikes in the North East (+21.8%), Wales (+7.8%) and Greater London (+6.5%).
However, Greater London remains the priciest region for tenants with average monthly rents reaching £2,328.
Fleet’s chief commercial officer, Steve Cox, said: “These latest figures show the private rental sector continues to perform strongly, particularly for landlords who know how and where to invest.
“Rent levels are rising in many areas, yields are holding up well, and we’re still seeing plenty of appetite from both seasoned portfolio landlords and new entrants alike.”
He added: “There’s no question that certain regions – particularly Wales and the North East – are offering a compelling mix of affordability and rental return, while the South continues to deliver strong capital value and long-term resilience.”
The barometer also found that East Anglia and the South East are the next most expensive areas for renters at £1,640 and £1,520, respectively.
Meanwhile, Yorkshire and Humberside (£861), the North East (£900) and Wales (£1,061) offered the most affordable options, blending cost-effectiveness with appealing rental returns.
Yields across England and Wales held firm at 7.5%, a slight rise from 7.4% in Q1 2025.
Wales led with a 9% yield, followed closely by the North West (8.8%) and the North East (8.7%), showcasing their high income potential relative to property values.
Fleet says that four regions saw yield increases, with Wales experiencing the largest jump at 1.3%.
However, modest year-on-year yield falls occurred in the North East (-1.4%) and West Midlands (-0.8%).
That drop is probably down to a market recalibration after strong gains in 2023 and early 2024, the report says.
Landlord activity also remained resilient, with 54% of Fleet’s Q2 mortgage applications coming from investors owning four or more properties.
First-time landlords accounted for 14% of BTL mortgage applications, consistent with Q1, indicating sustained confidence in property investment.
Limited company borrowing was prevalent, comprising 81% of applications, driven by its tax benefits and suitability for portfolio investors.
The average rental cover at application stood at a robust 187%, with average loan sizes at £198,000.
Mr Cox said: “What’s also clear is the so-called landlord exodus hasn’t materialised – our data shows 39% of business in Q2 was for property purchase, and the average portfolio size has grown to 10 properties.
“This is a sign of landlords actively reshaping and expanding their portfolios in line with evolving tenant demand.”
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Northernpleb
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Sign Up9:55 AM, 15th July 2025, About 4 months ago
I don`t know who these guys are surveying ?
Andy
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Sign Up10:37 AM, 15th July 2025, About 4 months ago
Mr Cox sells mortgages and therefore has to talk his book. Us knowing landlords understand the real market is far less rosey.
Beaver
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Sign Up10:43 AM, 15th July 2025, About 4 months ago
There’s another post on this site that says:
https://www.property118.com/landlord-whales-the-super-landlords-quietly-exiting-the-sector-for-big-cheques/
“Within the last year, it’s well known that landlords are exiting and selling up. New research by Open Property Group has revealed a third of landlords plan to retire from or exit the buy-to-let market. A record 26% of landlords sold at least one property in the last 12 months, while just 8% of landlords bought. Coupled with the Renters’ Rights Bill, which is already sending waves through the sector before it’s even cemented into law, it makes sense that smaller to mid landlords are over and out.”
The last sentence probably points you in the right direction: The question is WHO is selling and what kind of landlord is buying?
The thing that sometimes surveys don’t tell you is that if for example 26% of small portfolio landlords sold at least one property (but only had 1-3 properties) but 8% of landlords bought (but were incorporated landlords buying larger numbers of properties or buying portfolios) then this would be one possible explanation for what is reported here.
Small portfolio landlords had a tendency to hold rents down a bit to minimise the risk of void periods. Incorporated large portfolio landlords don’t necessarily HAVE TO RAISE RENTS as much because they can still offset their finance costs against revenues. At the same time they aren’t as vulnerable to void periods because they can offset void periods against rents from other properties. So larger, incorporated landlords can take their time to refit or redecorate during the void period and take their time advertising at a higher price to find new tenants to maximise rents and yields; although in fact they probably have greater reach so in this market they wouldn’t have much difficulty in finding new tenants and probably don’t have to advertise for long.
The key thing to understand is that incorporated large portfolio landlords are less vulnerable than smaller landlords with 1-2 properties and they can maximise market rents.
The policy of successive governments…conservative, labour, and above all the SNP….has been to penalise the smaller landlords and favour the big ones. The collective consequences of all their policies has been a reduced supply of housing and rising rents for tenants.
The Renters Reform Bill is set to make the situation worse. Stopping landlords from taking offers above the advertised PCM rent will mean that landlords and their agents move to advertising rents at a much higher level, and this will drive market rents up.