Annual rental yields across the majority of regions within England and Wales continued to rise albeit with six out of 10 regions seeing a quarterly dip, Fleet Mortgages’ latest Buy-to-Let Rental Barometer reveals.
The second quarter data provides a regional snapshot of rental yield trends with this iteration comparing Q2 2026 to Q2 2025.
At a national level, average yields for England and Wales rose by 0.3% annually to 7.8%, while quarter-to-quarter there has been a short-term dip from 8.1% in Q1.
There has been movement in the regional table since the last quarter, but the North East region continues to lead with annual rental yields up by 0.5%, however quarter-to-quarter it too has seen a fall of 0.6% to 9.2%.
The North West has moved into second spot with an average rental yield of 8.8% and six regions continue to hold above 8%, with the other four being Yorkshire and Humberside, Wales, and both the East and West Midlands.
Higher-yielding areas in the North and Midlands are continuing to outperform the South, with Wales and the South West seeing an annual fall.
However, the majority of regions have seen a quarterly fall in average yields, with the only exceptions being the East Midlands, Greater London and the North West which saw increases, and the South East which stayed the same.
Both Fleet’s own average product rates and market average two- and five-year fixed-rates rose quarter-on-quarter.
The lender did however highlight a shift in market conditions in the latter half of the second quarter which had provided greater stability and allowed lenders to reintroduce products withdrawn earlier in the year, and make a series of price cuts to existing products.
Meanwhile, purchase 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, first-time landlord applications represented 9% of all business, slightly down on the 11% recorded in the first three months of the year.
Fleet also highlighted how the professionalisation of the landlord community was continuing with the average number of investment properties held by Fleet borrowers maintained at 16, compared to 10 in Q2 last year.
Adding to this theme, limited company business continued to dominate with 78% of all borrowing coming from corporate vehicles, compared to just 22% for private investors.
Fleet Mortgages chief commercial officer Steve Cox says: “While it’s important not to assume this calmer environment will continue indefinitely, the market is undoubtedly ending the quarter in a stronger position than many expected a few months ago.”
“The MPC has held Bank Base Rate, inflation looks like it has, to some extent, been contained and advisers have a much-improved range of options for their landlord borrower clients.”
“Our figures also continue to show professional landlords remain active. Purchase activity has picked up, portfolio landlords continue to expand where opportunities exist and limited company borrowing remains the preferred route for most investors. Those are all positive indicators for 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 advisers and landlords increasingly understand this ‘new normal’. The important point is that when conditions improve, as they have during the latter part of this quarter, the market is able to respond quickly, providing borrowers with greater choice and improved pricing.”
“That should give confidence as we move into the second half of the year, even if we continue to expect markets to remain sensitive to wider economic, UK political and geopolitical events.”
