Rental yields across England and Wales increased across every region annually in Q1 2026, offering a positive start to the year for landlords, according to Fleet Mortgages’ latest Quarterly Rental Barometer.
Nationally, average yields rose by 0.7% annually and 0.4% quarterly to reach 8.1%, underlining continued tenant demand and the ability of landlords to generate solid income returns.
The North East again delivered the highest average yield at 9.8%, while a number of regions across the North and Midlands now sit above the 8% mark, including Yorkshire and Humberside, the West Midlands, North West, Wales and the East Midlands.
Specialist buy-to-let lender, Fleet, said the data highlighted a continuation of long-term regional trends, with higher-yielding areas in the North and Midlands outperforming, but also pointed to encouraging signs for landlords in southern regions where yields have also moved higher.
| 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 headline figures point to a strong quarter, Fleet said it is important to view the data in the context of how the quarter unfolded. January and February provided relatively stable conditions, with mortgage rates easing and affordability improving. However, March saw a significant shift in market conditions, driven by global events which pushed up swap rates and led to widespread product withdrawals and repricing across the mortgage market.
As a result, Fleet said the positive trends seen in Q1 are likely to be tested as the market moves through Q2, particularly for landlords looking to purchase new properties. The lender noted purchase activity had already started to soften during Q1, with applications for purchases falling to 33% of total business, suggesting landlords were already beginning to take a more cautious approach even before the March volatility.
Despite the shift in market conditions, Fleet said the underlying fundamentals of the rental sector remain strong. Tenant demand continued to be strong across the country, helping to underpin rental values and, in turn, yields. Rental income data pointed to sustained demand, with average monthly rents increasing in every region with some of the biggest annual rises in the North East at +33.6%; and Yorkshire & Humberside at +31.0%.
Fleet said ongoing demand was particularly important in a higher-rate environment, as it helped landlords maintain income levels and manage increased financing costs. This was reflected in borrower behaviour, with the lender’s average loan size increasing to £210k during the quarter.
There were also clear signs the sector continued to be driven by more experienced landlords. Over 63% of applications came from those holding four or more properties, while the proportion of landlords with 15 or more properties rose to 30%, showing continued growth at the larger portfolio end of the market.
In addition, limited company borrowing now accounted for 78% of all Fleet’s applications, underlining the ongoing shift towards a more structured and professional approach to buy-to-let investment.
Steve Cox, chief commercial officer, said:“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.”
The full Fleet Mortgages’ Rental Barometer can be viewed here:
