"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"
- Steve Cox - Fleet Mortgages
Landlords across England and Wales continue to benefit from strong rental yields, with northern regions leading the way, according to buy-to-let specialist lender, Fleet Mortgages’ latest Buy-to-Let Rental Barometer for Q1 2025.
The data highlights a continued upward trend in rental yields across several key regions, with the North East delivering the highest yield at 9.2%, followed by the North West at 8.4% and Yorkshire & Humberside dipping slightly from 8.5% last year to 8.1%.
Fleet said these regions remain attractive for landlords due to their combination of lower property prices, strong tenant demand and favourable rental income.
Across England & Wales, the average rental yield stayed the same quarter-on-quarter at 7.4%, although there was a yearly increase of 0.3%, reflecting continued resilience in the private rental sector despite ongoing economic and regulatory challenges.
First-time landlords also continue to be a significant force in the Northern regions of England. 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.
Fleet Mortgages highlighted the high number of first-time landlords in northern regions is likely driven by several factors, including lower property prices and more affordable rents — the North East remains the most affordable rental market with an average monthly rent of £739pcm, and the lowest average loan amounts, at £85k per mortgage.
In comparison, Southern regions, where property prices and loan amounts are higher, recorded lower annual yields: Greater London at 6%, the South East at 6.5% and East Anglia at 6.7%.
Fleet also highlighted regional differences in the percentage of landlords borrowing through a limited company structure. In the North East, 96% of all applications received were from limited company landlords, compared to 68% in Greater London.
Additionally, the split between purchase and remortgage applications remained more balanced in certain regions. The North East was the only region where the number of purchase applications (54%) were greater than remortgage (46%). However, in Greater London, 67% of business was for remortgage, compared with 33% for purchase; similarly in Wales the figure was 66% remortgage/34% purchase.
“These figures reinforce the strength of the private rental sector, with rental yields remaining high, particularly in northern regions," explained Fleet Mortgages chief commercial officer, Steve Cox. "Landlords continue to see value in investing in buy-to-let properties, particularly where demand is strong and returns remain favourable.
He added, “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 narrative that landlords are solely focused on remortgaging existing portfolios is increasingly challenged by our latest Rental Barometer. The data clearly shows that where opportunities exist, landlords— both new and experienced— are actively purchasing.
“The regional disparities remain keen though, with affordability and strong yields making northern regions particularly attractive."
Cox concluded, “Despite increasing costs, including the higher 5% stamp duty surcharge introduced last year, landlords remain committed to expanding their portfolios. This is crucial given that 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.”
