According to Fleet Mortgage’s latest Rental Barometer, rental yields increased across all regions of England and Wales in the first quarter of 2026.
The data, which compares the first quarter of 2026 with the same period in 2025, shows average yields rose 0.7% year-on-year and 0.4% in the quarter to 8.1%.
The North East recorded the highest average yield of 9.8%, while several areas of the North and Midlands – including Yorkshire and Humberside, the West Midlands, the North West, Wales and the East Midlands – recorded yields of more than 8%.
The figures show strong returns in the Northern and Midlands regions, while yields in the Southern regions have also increased over the past year.
| average rental yield | y/w change | ||
| Area | 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 and Wales (total) | 7.4% | 8.1% | 0.7% |
While the overall figures indicate a strong first quarter, Fleet Mortgage said market conditions were not uniform throughout the period. January and February were relatively stable with mortgage rates easing and affordability improving, but conditions changed in March as global events pushed up swap rates, prompting lenders to withdraw and reprice products.
Fleet said this change is likely to impact activity in the second quarter, particularly among homeowners considering new purchases. Purchase applications had already begun to decline during the first quarter, accounting for 33% of total turnover, 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 in all regions, with the largest annual increases recorded in the North East and Yorkshire and Humberside.
Fleet said continued tenant demand is important in the high-rate environment, as it helps landlords maintain income while managing rising borrowing costs. This was reflected in the lending data, with the average loan size increasing to £210,000 during the quarter.
The data also indicates continued activity from more experienced landlords. More than 63% of applications came from people 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 a more formal approach to buy-to-let investing.
Steve Cox, Chief Commercial Officer at Fleet Mortgage, commented: “The Q1 data paints a positive picture for landlords, with rental yields rising in every region and average returns now above 8% nationally. This reflects the strength of tenant demand and how improving rental income is continuing to support landlord returns.
“However, it is important to understand that the majority 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 working with looks quite different after the continuation of volatility seen since March.
“The increase in swap rates and the resulting changes in 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 this may continue in the short term.
“That said, the fundamentals of the UK private rental sector remain strong. Tenant demand is not waning, yields are good, and landlords should continue to take a long-term view of their investments.
“As we move into the second quarter, it will be important to see how these recent market changes alter activity and sentiment, but the sector remains well supported even as we adjust to a more uncertain environment.”