Rental yields have increased in eight out of 10 regions across England and Wales over the past year, with average returns climbing to 7.9%, according to new figures from Fleet Mortgages.
The lender’s Q3 2026 Rental Barometer shows average yields rose from 7.5% a year earlier, despite continued pressure on landlords from borrowing costs, regulation and wider economic uncertainty.
Regional yield performance
Yorkshire and Humberside recorded the highest average yield at 9.3%, up from 8.2% in Q3 2025. The North East followed closely at 9.2%, while the East Midlands recorded one of the largest annual increases, rising from 7.5% to 8.4%.
The West Midlands and South East both saw yields increase by 0.7 percentage points, reaching 8.2% and 7.2% respectively. Greater London remained the lowest-yielding region at 6.4%, although this was up from 5.9% a year earlier.
Only the North West and Wales recorded annual declines, with yields falling by 0.2 and 0.7 percentage points respectively.
Landlord buying activity tells a different story
Despite the rise in yields, Fleet’s figures show that stronger rental returns do not always translate into higher levels of investment activity. In Yorkshire and Humberside, property purchases accounted for 43% of the lender’s applications during Q3.
However, Wales recorded the highest proportion of purchase applications at 46%, despite average yields falling from 8.1% in Q2 to 7.5% in Q3. Average monthly rents in Wales also dropped from £1,214 to £1,079 over the same period.
The South West recorded a notable increase in purchase activity, with the proportion of applications involving purchases rising from 23% to 34% quarter-on-quarter. Average yields in the region also improved from 6.6% to 7.1%. London continued to command the highest rents, with average monthly payments rising from £2,364 in Q2 to £2,597 in Q3.
Professional landlords account for growing share of applications
The figures also point to a growing concentration of activity among portfolio landlords. The average landlord applying to Fleet owned 18 investment properties during Q3, compared with 16 in the previous quarter and 12 a year earlier.
Landlords with portfolios of 15 or more properties accounted for 30% of applications. Meanwhile, two-thirds of applications came from landlords owning at least four properties. First-time landlords represented 10% of applications, up slightly from 9% in Q2.
Steve Cox, chief commercial officer at Fleet Mortgages, said: “Landlords have had an enormous amount to consider during 2026, from changing mortgage pricing and funding costs through to the Renters’ Rights Act and the wider economic environment, but rental yield remains one of the most important numbers when assessing any potential investment.”
He added: “What is equally interesting is the regions with the highest yields are not necessarily those recording the greatest levels of purchase activity. Wales had the highest purchase proportion during Q3 at 46% despite yields falling during the quarter, while purchase activity in the South West increased considerably at the same time as yields recovered to 7.1%.”
Cox said landlords needed to consider financing costs, tenant demand and achievable rents alongside headline yields. He continued: “We are also seeing increasingly experienced landlords making those assessments, with our average landlord now owning 18 properties compared with 12 a year ago, while almost a third of applications are coming from those with portfolios of 15 or more.”
The figures reflect Fleet Mortgages’ lending activity and should not be treated as a comprehensive measure of all landlord investment across England and Wales.
