Paragon Bank research shows highest yields since 2011
Buy-to-let yields have hit their highest level in more than 15 years, reaching 7.22% in the third quarter, the highest yield since the first quarter of 2011.
The company’s Q3 2026 Buy-to-Let Yields report showed gross yields rose 0.22 percentage points, up from 7.00% in the second quarter of 2026 and 0.28 percentage points higher than 6.94% in the third quarter of 2025.
Paragon says the figures show a continued strengthening in yields since 2022, driven by subdued house price growth and continued demand for privately rented properties.
Regional differences
The highest yields regionally were in the East Midlands, at 8.10%, which was 0.55 percentage points higher than both the previous quarter and the same period last year.
That was followed by the North East at 8.02%, Scotland at 7.95% and the North West at 7.88%.
The lowest average regional yield continued to be in Greater London, at 5.79%, 0.23 percentage points higher than in the second quarter and 0.17 percentage points above the same period in 2025.
Houses in multiple occupation generated the highest average yield at 8.80%, 0.06 percentage points lower than in the previous quarter but up 0.37 percentage points annually. HMOs were followed by multi-unit blocks at 7.36%, flats at 6.66% and terraced homes at 6.46%.
By property type, flats experienced the strongest annual growth, up 0.40 percentage points compared with the third quarter of 2025, while yields on multi-unit blocks rose by 0.34 percentage points over the same period.
Louisa Sedgwick, Paragon Bank managing director of mortgages, said: “Buy-to-let yields reaching their highest level since 2011 demonstrates the attractive returns that well-managed rental property can continue to generate.
“The increase reflects the balance between property values and rental income, with more subdued house price growth combining with strong demand for rented homes across many parts of the country.
“The regional figures also show why landlords carefully consider local market conditions when investing. Areas with more affordable property values and sustained tenant demand can offer particularly attractive yields, as we see in the East Midlands and across the north of England.”
Regional yields
| Region | Q3 2026 | Change from Q2 2026 | Change from Q3 2025 |
| East Midlands | 8.10% | +0.55pp | +0.55pp |
| North | 8.02% | +0.08pp | -0.15pp |
| Scotland | 7.95% | -0.03pp | +0.38pp |
| North West | 7.88% | +0.12pp | +0.13pp |
| South West | 7.79% | +0.42pp | -0.01pp |
| Wales | 7.79% | -0.04pp | -0.06pp |
| East Anglia | 7.53% | +0.59pp | +0.14pp |
| West Midlands | 7.38% | +0.10pp | +0.16pp |
| South East | 6.58% | +0.10pp | +0.14pp |
| Greater London | 5.79% | +0.23pp | +0.17pp |
Yield by property type
| Property type | Q3 2026 | Change from Q2 2026 | Change from Q3 2025 |
| HMO | 8.80% | -0.06pp | +0.37pp |
| Multi-unit block | 7.36% | +0.16pp | +0.34pp |
| Flat | 6.66% | +0.22pp | +0.40pp |
| Terraced | 6.46% | +0.16pp | +0.21pp |
| Semi-detached | 5.75% | -0.04pp | +0.18pp |
| Bungalow | 5.23% | +0.19pp | +0.18pp |
| Detached | 4.77% | +0.07pp | +0.02pp |
