South west England sees the strongest rental yield growth – Paragon

South west England has emerged as Britain’s frontrunner in rental yield growth for buy to let properties, according to Paragon Bank.

Its latest BTL yield report reveals that landlords in the south west saw yields climb from 7.27% in Q2 2024 to 8.06% in Q2 2025.

That’s a rise of 0.79 percentage points, the largest across England, Scotland and Wales.

Cities like Plymouth and Taunton are key contributors to this surge, the bank says.

Most regions saw yields rise

Paragon’s director of mortgages, Louisa Sedgwick, said: “It’s encouraging to see that most regions across England, Scotland and Wales have seen a steady increase in the average yields over the past year.

“Additionally, potential returns remain near the record high level we reported earlier in the year.

“A key component of this is the continued demand for rented property.”

She added: “Alongside long-term capital gains, this illustrates the enduring appeal of buy to let investment.”

Plymouth offers the best yield

The report also shows that Plymouth leads the city-level yields with an impressive 9.51%, while Taunton ranks 14th with 8.36%.

Paragon’s recent buy to let hotspots index underscores Plymouth’s appeal, noting that its PL4 postcode recorded the second-highest purchase volumes in the year ending 30 June, surpassed only by Cardiff’s CF24.

The east Midlands followed closely, with yields rising from 6.71% to 7.48%, a 0.77 percentage point increase.

Scottish yields dip

East Anglia secured third place, with a 0.67 percentage point gain, while the West Midlands saw a 0.52 percentage point uptick.

Scotland, however, was the exception, experiencing a slight dip from 7.56% to 7.48%.

Nationwide, average yields across England, Scotland and Wales rose from 6.70% to 7.11% over the year, nearing a record high.

Wales topped the regional rankings with 8.59%, followed by the south west at 8.06% and the north west at 7.92%.

Greater London lagged with the lowest yields at 5.73%, reflecting its steep property prices.