Average rental yields across England and Wales rose to 7.8 percent in the second quarter of 2026, up 0.3 percentage points year on year, even as most regions slipped back from the stronger first-quarter peak.
The fresh data matters because it points to a market where income returns are still holding up, but landlords are no longer getting a free ride from quarter-on-quarter momentum. For investors weighing fresh purchases, the regional split is becoming more important than the headline average.
For landlords, the key point now is not simply that yields remain high by recent standards. It is that stronger returns are still concentrated in regions where purchase prices remain lower, while financing conditions and rate uncertainty continue to shape where portfolio growth looks sensible.
North East stays top as the quarterly picture softens
Fleet Mortgages’ latest Rental Barometer said the North East remained the strongest region for average rental yields at 9.2 percent, despite a 0.6-point quarter-on-quarter dip. The North West moved into second place at 8.8 percent, while Yorkshire and Humberside, Wales, and both the East and West Midlands all stayed above the 8 percent mark.
That still leaves a clear pattern for landlords. Higher-yielding regions remain concentrated outside the South, but the pace of improvement is no longer broad-based. In practice, that means landlords chasing income may still find the numbers stack up in regional markets, but they need to underwrite more carefully if pricing, voids or financing costs shift again.
This follows Landlord Knowledge’s April report on Fleet Mortgages’ rental yield data, which showed average yields climbing to 8.1 percent with the North East leading on 9.8 percent. The latest figures suggest yields are still historically strong, but the easy upward run seen earlier in the year has started to flatten.
Professional landlords are still buying
Fleet said purchase activity in its own lending mix rose from 33 percent in Q1 to 36 percent in Q2, closer to the 39 percent level seen a year earlier. Applications from landlords with six to 14 properties also increased, while limited company borrowing still accounted for 78 percent of all business.
That combination matters for smaller landlords as well as portfolio operators. A market led by experienced borrowers tends to favour disciplined buying rather than speculative expansion. It also reinforces the view already visible in recent buy-to-let rate coverage on Landlord Knowledge that landlords are still active, but are responding closely to pricing and structure rather than simply chasing volume.
Steve Cox, chief commercial officer at Fleet Mortgages, said greater stability was returning, swap rates were easing and lenders were once again able to compete through lower rates and a broader range of products. He added that professional landlords remained active, with purchase activity picking up and portfolio landlords continuing to expand where opportunities existed.
Landlords should read that alongside the softer quarterly yield figures. Demand remains firm, but investors are clearly becoming more selective about where and how they borrow. The underlying numbers still favour buy-to-let in many regional markets, though not every purchase will justify today’s funding costs.
For the raw data, landlords can review Fleet Mortgages’ Q2 2026 Rental Barometer summary.
What this means for landlords
- If you’re buying for yield: the North East, North West and several Midlands markets still offer the strongest income numbers, but quarter-on-quarter slippage means deal selection matters more.
- If you’re refinancing: stable yields help support lender confidence, but borrowing structure and interest cover remain central to affordability.
- Watch for: whether Q3 data shows the recent dip was temporary or the start of a flatter yield cycle.
- Bottom line: yields are still strong enough to keep professional landlords in the market, but this is a region-by-region story now.
Editor’s view
Strong yields still attract attention, but landlords should not mistake a healthy average for a universal green light. The better read is that disciplined investors are still finding opportunities, while weaker locations and weaker deals are becoming easier to spot.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 03 July 2026
Sources: Fleet Mortgages
Related reading: Rental yields hit 8.1% as North East leads UK with 9.8% returns
