Landlords can benefit from better rental yields than a year ago, as investors made typical returns of 7.4% in the first quarter of 2025 across England & Wales.

This marks an increase from 7.1% during the same period last year, Fleet Mortgages’ Buy-to-Let Rental Barometer for Q1 found.

Yields improved across every region of England & Wales with the exception of Yorkshire & The Humber, where they nonetheless still stand at 8.1%.

Steve Cox, chief commercial Officer at Fleet Mortgages, said: “These figures reinforce the strength of the private rental sector, with rental yields remaining high, particularly in northern regions.

“Landlords continue to see value in investing in buy-to-let properties, particularly where demand is strong and returns remain favourable.

“There has been much discussion around landlords exiting the market, but our data shows a steady level of purchase activity alongside remortgages. While challenges exist, landlords who manage their portfolios effectively are still benefiting from solid returns.”

The best rental yields across England & Wales are in the North East, with yields reaching 9.2%, increasing by 0.8% year-on-year.

The region is still the most affordable, with an average monthly rent of £739 per month.

Greater London has the lowest yields, at 6.0%, followed by the South East (6.5%) and East Anglia (6.7%).

First-time landlords are a significant force in the Northern regions of England.

Some 16% of all mortgage applications received from landlord borrowers in Yorkshire & Humberside came from first-time landlords, reinforcing the region’s attractiveness for new investors, with the North East following closely at 15%

The East Midlands led the way in Q1 2025 with 19% of all applications coming from first-time landlords; with the West Midlands, Greater London and the South West, observing the lowest number of applications from first-time landlords, with just 10% of applications.

Cox added: “Despite increasing costs, including the higher 5% stamp duty surcharge introduced last year, landlords remain committed to expanding their portfolios. This is crucial given tenant demand continues to outstrip supply, resulting in ongoing rental growth.

“We need to ensure policies support the continued supply of rental homes, rather than discouraging investment. The private rental sector plays a vital role in the housing market, and it is clear many landlords— particularly in high-yield regions— are keen to invest further.”

Via @PropertyWire