Strong rental yields fuel landlord investment – Fleet

Most landlords in England and Wales are enjoying robust rental yields despite minor regional fluctuations, one BTL rental barometer reveals.

According to Fleet Mortgages, the PRS is a stable market which is being underpinned by strong tenant demand and sustained investor enthusiasm.

Wales has emerged as the top performer, boasting an average quarterly yield of 9%, followed closely by the North West at 8.8% and the North East at 8.7%.

These areas remain attractive to landlords due to affordable property prices and persistent tenant demand relative to supply.

Yields are robust

Fleet’s chief commercial officer, Steve Cox, said: “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.

“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, all of which remain critical factors in building sustainable portfolios.”

He added: “While some Southern regions have lower yield percentages, this is normal given property prices.

“They continue to deliver in terms of capital appreciation, and monthly rental values remain high.”

Average yields edge up

Fleet’s barometer also shows the average yield edged up from 7.4% in Q1 to 7.5%, though it dipped slightly by 0.1% compared to Q2 2024.

Despite annual declines in some regions, most notably the North East (-1.4%), West Midlands (-0.8%) and East Anglia (-0.6%), the quarterly figures show only a modest 0.5% drop in these areas.

Wales led annual gains with a 0.7% increase, while its quarterly surge of 1.3% was mirrored by smaller upticks in the East Midlands, North West and South West, each at 0.4%.

Monthly rental values also saw significant movement, with the North East experiencing a remarkable 21.8% rise.

It was followed by Wales at 7.8% and Greater London at 6.5%.

However, Yorkshire and Humber, the South West, South East and West Midlands saw quarterly declines ranging from 1% to 5.8%.

Most affordable rents

Overall, rental values climbed 2.9% quarter-on-quarter.

Yorkshire and Humber offers the most affordable rents at £861 per month, while Greater London remains the priciest at £2,328.

Fleet’s data underscores sustained landlord activity, with 39% of investors looking to acquire properties, consistent with Q1 figures.

More than half (54%) of landlords own four or more properties, and first-time landlord applications held steady at 14%.

Limited company applications dominated, comprising 81% of Fleet’s lending requests.