Rental returns in Merthyr Tydfil, Brent and Hammersmith and Fulham have jumped over the last year as UK rents have surged amid cooling house prices, data from letting agent Lomond shows.

In Merthyr Tydfil rental yields went up by 1.4%, Brent saw increases of 1.3% and in Hammersmith and Fulham they reached 1.2%.

Westminster also saw rental yields go up by 1.2% while in Reading, Folkestone and Hythe and Salford they increased by 0.8%.

Every region of England and Wales has seen positive growth as a result of rental growth far exceeding the rate of house price growth seen.

Seeing the largest change in the average rental yield was London reaching 0.4%, followed by the South East 0.3% and the North West 0.3%.

Meanwhile, the North East is home to the strongest overall yield at 4.9%.

Lomond chief revenue officer John Ennis says: “Generally speaking, the property market has held its own over the last year with house prices standing strong despite the turbulence caused by higher mortgage rates. Now we have seen the Bank of England reduce rates we are certainly see significant optimism coming back in from both buyers and sellers.”

“When breaking the market down at a more granular level, there are a multitude of areas that have seen minimal movement in house prices yet where rental values have performed very strongly indeed.”

“This increased level of housing market affordability coupled with a strong rental market performance has helped to significantly improve the yields available to buy-to-let investors and created opportunities in markets that they may not have previously considered.”