Fleet’s Rental Barometer Q2 2025: Rental yields remain resilient as landlords continue to invest

Fleet said these regions continue to hold an attraction for landlords due to the strength of yield achievable, plus a combination of lower property prices and sustained demand, especially when compared to supply.

Across England & Wales the average rental yield dipped by just 0.1% over the year, however quarter-on-quarter it was up by the same amount from 7.4% in Q1 2025 to 7.5% in Q2.

Fleet said this reflects a continued period of yield stability across all regions in which it lends, underpinned by strong and sustained appetite from existing landlords to looking to maintain and expand their portfolios and benefit from both current rental income levels and the long-term potential for capital appreciation.

Four regions did show a slight dip on the yearly yield comparison, with the biggest dips being in the North East (-1.4%), the West Midlands (-0.8%) and East Anglia (-0.6%). However, the quarter-on-quarter figures reveal that these three regions had seen only a 0.5% fall over the three months, with the expectation that these current levels could be sustained for a longer period going forward.

The biggest yearly increase in yields came from Wales, which saw a 0.7% increase, while its quarterly increase was a significant 1.3%. Other regions that also saw a quarterly increase included East Midlands, the North West and the South West, which all saw increases of 0.4%.

Over the course of Q2, the North East saw a 21.8% increase in monthly rental values, followed by 7.8% in Wales and 6.5% in Greater London. However, four regions showed a quarterly dip – Yorkshire & Humberside (-1%), the South West (-1.6%), the South East (-3.5%) and the West Midlands (-5.8%). Overall, across all regions, rental values were up 2.9% quarter-on-quarter.

Yorkshire & Humberside has the most affordable monthly rent figure of £861 per calendar month (pcm), while the most expensive is Greater London at £2,328 pcm.

The Rental Barometer also looks at a range of other related data. Fleet’s lending data shows landlords remain active and committed to expanding portfolios, with 39% looking to purchase – the same figure as in Q1 – and 54% owning four or more properties.

The attraction of buy-to-let for new landlords also remains strong, with first-time landlord applications holding steady at 14% over the quarter. Data also shows the ongoing dominance of limited company buy-to-let – 81% of all applications received by Fleet were from limited companies, with just 19% from those looking to borrow in their individual name.

On pricing, Fleet’s average two- and five-year fixed rates fell to 4.35% and 5.13% respectively (down from 4.63% and 5.15% in the last quarter), highlighting it said its continued pricing; it continuing to outperform peer market averages rates (4.93% and 5.27%).

Previous Rental Barometer reports are available on Fleet’s website.

Steve Cox, Chief Commercial Officer at Fleet Mortgages, commented:

“Our latest Rental Barometer shows yields across England and Wales continue to hold firm, underlining the enduring strength of the private rental sector and landlords’ commitment to delivering the supply required by sustained tenant demand.

“While we’ve seen some modest annual dips in specific regions, overall yields remain robust, with the quarterly increase to 7.5% reflecting a strong and stable foundation for landlords seeking long-term income and capital growth.

“It’s particularly encouraging to see Wales now leading the table with a 9% average yield, and the North West and North East remaining highly competitive. These areas continue to offer landlords a compelling mix of yield, affordability and tenant demand, all of which remain critical factors in building sustainable portfolios.

“While some Southern regions have lower yield percentages, this is normal given property prices. They continue to deliver in terms of capital appreciation, and monthly rental values remain high. The growth in rents across most regions – particularly the substantial 21.8% jump in the North East – illustrates that tenant demand is still outpacing supply, supporting continued investment.

“It’s clear landlords are still very much in the market – over half of our business continues to come from those with four or more properties, and purchase demand has held steady despite wider economic pressures. It’s also pleasing to see first-time landlord activity staying consistent at 14% which suggests new entrants are still seeing long-term value in buy-to-let.

“We’re also proud to be continually competitive on pricing, with our fixed-rate products outperforming peer averages. Combined with strong rental yield and continued appetite, particularly from limited company landlords – now 81% of all applications – it shows there are still plenty of reasons to be optimistic about the future of the buy-to-let sector.”