Rental yields for buy-to-let landlords declined in the second quarter of 2025 across the majority of English and Welsh regions, despite showing annual growth, according to new data from Fleet Mortgages.
The lender’s latest Buy-to-Let Rental Barometer reveals that six out of 10 regions experienced a quarter-on-quarter drop in yields, falling from 8.1% in Q1 to 7.8% in Q2. However, average yields remained 0.3% higher compared to the same period last year.
Regional performance
The North East continues to deliver the highest rental yields at 9.2%, representing an annual increase of 0.5%, though this figure marks a 0.6% decline from the previous quarter. The North West has moved into second position with yields of 8.8%.
Six regions maintain yields above the 8% threshold, including Yorkshire & Humberside, Wales, and both the East and West Midlands. Northern and Midlands areas continue to outperform southern regions, with Wales and the South West recording annual declines.
Market activity
The data emerges at a time when landlords are adjusting to new regulatory frameworks, with the Renters’ Rights Act introduced in May prompting some investors to reconsider their portfolios.
Steve Cox, Chief Commercial Officer at Fleet Mortgages, said: “Our figures continue to show professional landlords remain active. Purchase activity has picked up, portfolio landlords continue to expand where opportunities exist and limited company borrowing remains the preferred route for most investors.”
The findings suggest that despite short-term yield compression, the underlying buy-to-let market continues to attract professional investors, particularly in higher-yielding regions. However, the quarterly decline may reflect ongoing challenges facing landlords including regulatory changes and rising operational costs.