Rental yields increased across all regions of England and Wales in the first quarter of 2026, according to the latest Rental Barometer from Fleet Mortgages.
The data, which compares Q1 2026 with the same period in 2025, shows average yields rose by 0.7% year-on-year and 0.4% on the quarter to 8.1%.
The North East recorded the highest average yield at 9.8%, while several regions in the North and Midlands – including Yorkshire and Humberside, the West Midlands, the North West, Wales and the East Midlands – reported yields above 8%.
The figures continue to show stronger returns in northern and Midlands regions, while yields in southern areas have also increased over the past year.
| Average Rental Yields | y/y change | ||
| Region | 2025 Q1 | 2026 Q1 | |
| North East | 9.2% | 9.8% | 0.6% |
| Yorkshire and Humberside | 8.1% | 9.0% | 0.9% |
| West Midlands | 7.7% | 8.6% | 0.9% |
| North West | 8.4% | 8.5% | 0.1% |
| Wales | 7.7% | 8.6% | 0.9% |
| East Midlands | 7.1% | 8.0% | 0.9% |
| South West | 6.7% | 7.8% | 1.1% |
| East Anglia | 6.7% | 7.2% | 0.5% |
| South East | 6.5% | 6.9% | 0.4% |
| Greater London | 6.0% | 6.1% | 0.1% |
| England & Wales (Total) | 7.4% | 8.1% | 0.7% |
While the overall figures indicate a strong first quarter, Fleet Mortgages said market conditions were not consistent throughout the period. January and February were relatively stable, with easing mortgage rates and improved affordability, but conditions shifted in March as global events pushed up swap rates, prompting lenders to withdraw and reprice products.
Fleet said this change is likely to affect activity in the second quarter, particularly among landlords considering new purchases. Purchase applications had already begun to decline during Q1, accounting for 33% of total business, suggesting a more cautious approach even before the market volatility in March.
Despite this, demand in the rental sector remained strong, supporting rental values and yields. Average monthly rents increased across all regions, with some of the largest annual rises recorded in the North East and Yorkshire and Humberside.
Fleet noted that sustained tenant demand is important in a higher-rate environment, as it helps landlords maintain income while managing increased borrowing costs. This was reflected in lending data, with the average loan size rising to £210,000 during the quarter.
The data also indicates continued activity from more experienced landlords. Over 63% of applications came from those with four or more properties, while 30% were from landlords with portfolios of at least 15 properties.
Limited company structures accounted for 78% of applications, highlighting the continued shift towards more formalised approaches to buy-to-let investment.
Steve Cox, chief commercial officer at Fleet Mortgages, commented: “The Q1 data paints a positive picture for landlords, with rental yields increasing across every region and average returns now sitting above 8% nationally. That reflects the strength of tenant demand and how improved rental income continues to play in supporting landlord returns.
“However, it is important to recognise that much of this data reflects the first two months of the quarter, when conditions were more stable and mortgage pricing was easing. The market we are operating in now looks quite different following a continuation of the volatility we saw from March.
“The increase in swap rates and the resulting changes to product availability and pricing are likely to have an impact on landlord activity, particularly when it comes to new purchases. We have already seen some signs of a more cautious approach, and that may continue in the short term.
“That said, the fundamentals of the UK private rental sector remain strong. Demand from tenants is not going away, yields are holding up well, and landlords should continue to take a long-term view of their investments.
“As we move through Q2, it will be important to see how these recent market changes feed through into activity and sentiment, but the sector remains well supported even as it adjusts to a more uncertain environment.”
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