Average annual rental yields rise but most regions see quarterly dip: Fleet – Mortgage Strategy
The annual rental yield in many regions across England and Wales continued to grow although six out of 10 regions saw a dip in the quarter, Fleet Mortgages’s Buy-to-Let Rental Barometer revealed.
The second quarter data provides a regional summary of rental yield trends for this iteration comparing Q2 2026 and Q2 2025.
At a national level, the average yield in England and Wales rose by 0.3% year-on-year to 7.8%, while quarter-on-quarter there was a temporary dip from 8.1% in Q1.
There has been some movement in the regional table since last quarter, but the North East region continues to lead with annual rental yields up 0.5%, however quarter-on-quarter it also fell 0.6% to 9.2%.
The North West moved into second place with an average rental yield of 8.8% and six regions continued to hold above 8%, with the other four being Yorkshire and Humberside, Wales, and the East and West Midlands.
The most productive areas in the North and Midlands continue to outpace the South, while Wales and the South West see annual falls.
However, most regions saw a drop in yields quarter on quarter, with the only exceptions being the East Midlands, Greater London and the North West which saw an increase, and the South East which remained the same.
Both Fleet average product ratings and market average two- and five-year fixed-rate ratings increased quarter over quarter.
The lender however highlighted the change in market conditions in the latter half of the second quarter which provided greater stability and allowed lenders to re-launch products that were withdrawn at the beginning of the year, and make a series of price cuts on existing products.
Meanwhile, purchasing activity grew quarter-on-quarter for Fleet from 33% in Q1 to 36% in Q2.
The share of applications received from landlords with six to 14 properties grew from 26% in Q1 to 30% in Q2, while landlords with 15 or more properties accounted for 26% of applications.
At the same time, initial landlord applications represented 9 percent of all businesses, slightly lower than the 11% recorded in the first three months of the year.
Fleet also highlighted how the training of the home owner community was progressing with the average number of investment properties secured by Fleet borrowers being maintained at 16, compared to 10 in Q2 last year.
Adding to this theme, the limited company business continued to dominate with 78% of all borrowing from corporate vehicles, compared to only 22% for private investors.
Fleet Mortgages chief commercial officer Steve Cox says: “While it’s important not to assume that this calm will last forever, the market is undoubtedly ending the quarter in a stronger position than many expected over the past few months.”
“The MPC has held the Bank Base Rate, inflation appears to be, to some extent, subdued and advisers have a much improved range of options for their home owner mortgage clients.”
“Our statistics continue to show that professional landlords are still active. Buying activity is picking up, landlords continue to grow where the opportunity is and limited corporate lending remains the preferred route for many investors. Those are all good indicators of the underlying strength of the buy-to-let sector.”
“Periods of volatility have become a feature of the mortgage market rather than an exception, and advisors and home owners are increasingly recognizing this ‘new normal.’ The bottom line is that when conditions improve, as they did in the latter part of this quarter, the market is able to respond quickly, offering borrowers greater choice and improved rates.”
“That should provide confidence as we head into the second half of the year, although we continue to expect markets to remain sensitive to wider UK economic, political and political events.”
