Landlords ended 2025 with rental yields holding firm, as sustained tenant demand and tight supply continued to underpin rental income across much of England and Wales, according to new data from Fleet Mortgages.
The lender’s Q4 2025 Rental Barometer shows average yields rose to 7.7%, up from 7.4% a year earlier, offering reassurance to buy-to-let investors navigating higher costs, regulatory change and a slower sales market.
UK rental yields by region show broad-based strength
Fleet’s figures highlight a rental market that remains geographically diverse, with stronger returns no longer confined to northern regions alone.
The North East once again delivered the highest average yield at 9.6%, reflecting lower purchase prices and robust tenant demand. In practical terms, a landlord earning £900 a month in rent would be generating roughly £86 more per month than the national average yield implies.
Several other regions also recorded yields at or above 8%, including Yorkshire and Humberside, the North West, the West Midlands and the East Midlands. Notably, the West Midlands saw the sharpest annual improvement, with yields rising 1.5 percentage points to 8.1%.
Importantly for landlords operating in higher-priced areas, yields also moved higher across every southern region tracked. Greater London rose to 6.3%, while the South West and East Anglia recorded gains of 0.5 and 0.9 percentage points respectively, pointing to what Fleet described as a more balanced rental market.
Tenant demand and supply pressures continue to support rents
Fleet said the underlying driver remains familiar to landlords: demand for rental homes continues to outstrip supply in most regions.
Steve Cox, chief commercial officer at Fleet Mortgages, said the figures reflect “a market where tenant demand is still high, supply is not keeping pace and rental values are thus holding firm”, helping landlords protect income even as operating costs remain elevated.
That imbalance is increasingly visible beyond traditional hotspot regions. Rising yields in the South suggest landlords are still able to reprice rents where affordability allows, rather than seeing growth capped by location alone.
For investors, this matters because it reduces reliance on capital growth. Stable or improving yields provide a buffer against interest rate volatility and tax changes, particularly for those running portfolios on a long-term income basis.
Buy-to-let mortgage finance and portfolio trends among landlords
The Barometer also points to improving conditions on the finance side. Average fixed mortgage rates eased again in Q4, with both two-year and five-year products moving lower, supporting refinancing activity and selective new purchases.
Fleet’s data shows the sector continuing to tilt towards larger, more established landlords. More than half of applications came from borrowers with six or more properties, while the average Fleet landlord now holds 14 rental homes.
Limited company borrowing remains the dominant structure, reinforcing the trend towards professionalised portfolio management. At the same time, first-time landlord activity dipped slightly but still accounted for more than one in ten applications, suggesting buy-to-let continues to attract new entrants despite regulatory headwinds.
Cox said lenders are seeing landlords “act with confidence”, noting that portfolio growth and company structures indicate investors are “planning ahead and taking a long-term view of buy-to-let” as mortgage affordability improves.
Editor’s view
These figures underline a quiet but important truth: despite years of policy pressure, the fundamentals of the rental market have not shifted. Demand remains strong, supply remains constrained, and yields are holding up as a result. For landlords willing to run their investments as businesses rather than side projects, buy-to-let continues to reward patience.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance
Published: 27 January 2026
Sources: Fleet Mortgages Q4 2025 Rental Barometer; Fleet Mortgages commentary
Related reading: Interest rate cut boosts landlord confidence as new tracker mortgages launched
