New research has revealed that landlords investing in buy-to-let properties have seen the highest returns in London and the North East over the last five years, with both regions outperforming much of the rental market in England.
North east leads the way in rental yields
A study by London lettings and estate agent Benham and Reeves analysed rental market performance across England, calculating the average rental yield for buy-to-let investors over the last five years. The findings show that across England, the average yield has been 4.17%—a steady return for investors navigating an evolving market.
London remains a stronghold for rental investment, with average yields sitting at 4.42% over the past five years. However, it is the North East that has taken the top spot, offering landlords the most lucrative returns at 4.84%—the highest across the country.
The North West followed closely, securing the third-highest returns with an average yield of 4.38%, while Yorkshire and the Humber also proved a solid investment choice with 4.29%. The South West rounded out the top five at 4.03%.
At the lower end of the scale, the East Midlands recorded the weakest returns, with buy-to-let landlords seeing an average yield of just 3.83% over the same period.
London remains a top investment choice
Despite rising regulatory pressures and ongoing policy changes, London continues to offer attractive returns for investors. High tenant demand and a competitive rental market have ensured that landlords in the capital remain in a strong position.
Marc von Grundherr, Director at Benham and Reeves, noted: “Landlords have been hit hard in recent years with respect to the profitability of their portfolios, and we have yet more red tape on the way this year via the government’s misguided Renters’ Rights Bill.”
However, he highlighted that despite regulatory challenges, landlords who make informed, strategic investments are still reaping the rewards. “It’s fair to say that London remains the most lucrative area of the market, with the exception of the North East. We’ve seen a particularly strong performance across the North, with a lower cost of investment contributing to favourable yields. However, where London’s is concerned, the returns on offer are being very much driven by a buoyant rental market, fuelled by an overwhelming level of tenant demand.”
Buy-to-let remains a strong investment choice in 2025
Looking ahead, rental market fundamentals continue to support buy-to-let investments, with strong yields in key regions and persistent demand from tenants. Despite ongoing government intervention, landlords are still finding opportunities for profitable returns.
Von Grundherr remains confident in the sector’s stability, stating: “The likelihood is that very little will change in 2025, and despite the government meddling under the guise of improved tenant welfare, we expect buy-to-let to remain one of the most consistent investments available to the amateur and professional investor alike.”
With high tenant demand and limited rental supply continuing to drive up yields, landlords who navigate the market wisely will continue to benefit from one of the most stable asset classes available today.